Africa’s economies grew an average 5.8 percent in 2007-UN
By Tesfa-alem Tekle
April 2, 2008 (ADDIS ABABA) — Africa’s economies grew an average 5.8 percent in 2007 from 5.7 percent a year ago partly due to increased commodity prices but the growth failed to trickle down to the poor, Reuters quoted the United Nations as saying.
The annual report released by the Economic Commission for Africa (ECA) on Tuesday also said inflationary pressure from rising fuel prices would be a problem for both oil producers and importers on the continent.
“Despite high growth rates in recent years, this strong performance has not translated into meaningful gains in terms of social development,” the report which also projected growth in 2008 at 6.2 percent said.
Africa recorded an average budget surplus of 2.4 percent of gross domestic product in 2007. But 13 oil-exporting nations accounted for most of that with an average surplus of 5.3 percent, down from 6.1 percent in 2006.
That of non oil-producing countries however grew by 1.2 percent of GDP in 2007 from 1.1 percent before, highlighting the fact that most of the growth on the continent was underpinned by oil exports.
The ECA cautioned oil producers against spending all their earnings on consumption and urged them to invest some of it in production that would diversify their economies.
“Rising oil revenues fuel rapid increases in domestic demand that cause prices to rise in oil-exporting countries,” said the report, released at a meeting of African finance and economy ministers.
“Oil-exporting countries must direct a sizeable proportion of oil revenues to finance domestic investment. This will help to build productive capacity instead of fuelling government and private consumption,” the study said.
The ECA said about 60 percent of African countries had inflation of more than 5 percent in 2007 compared with 52 percent in the previous period.
It said economic growth in 2008 would not be affected by a slowdown in the U.S. economy but a global downturn in the medium term could cause a drop in demand for African exports.
East African economies are expected to see the fastest growth in 2008 in Africa with 6.6 percent owing to macroeconomic stability, followed by West Africa with 6.4 percent, the report’s lead author, Leone Ndikumana, said.
(ST)