Oil-importing economies, outside of South Africa, grew 5.2 percent in 2008, down from 5.8 percent in 2007

January 14th, 2009

Africa: Sub-Saharan Africa's economy grew by 5.4% in 2008

According to the World Bank's Global Economic Prospects for 2009, GDP gains in the subcontinent have been broad-based and less volatile, even in oil-importing economies, as strong commodity export revenues and capital inflows underpinned domestic demand.

"Another notable and encouraging feature of the recent growth spurt is the sustained contribution of fixed investment to growth, which carries positive implications for long-term potential growth.

"Strong external demand, high commodity prices, and relatively robust private capital inflows invigorated growth across a large spectrum of economies, whether resource rich or resource poor," said the report.

Oil-importing economies, outside of South Africa, grew 5.2 percent in 2008, down from 5.8 percent in 2007, while oil-exporting countries grew by more than 7.5 percent for a second consecutive year.

However, the World Bank said that several years of above-trend economic expansion have pushed a larger number of African economies up against capacity constraints stemming from inadequate investment in energy, roads, railways, and ports over the past decades.

This constraint along with high food and fuel prices has contributed to the upturn in inflation witnessed across the subcontinent during the year.

The World Bank expects growth in subcontinent to slow to 4.6 percent in 2009, as a result of the global financial and economic crisis. The effects of the crisis are likely to be much more limited in Sub-Saharan Africa than in other regions, because African economies are less integrated into the international financial system and rely relatively less on international capital and bond markets to finance investment.

Source:South Africa Good News (South Africa) - January 12, 2009.