Growth remains robust in Africa’s low-income countries - CNBC Africa

Growth remains robust in Africa’s low-income countries

Special Report

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Tanzania in East Africa is one of several countries where growth remained robust. PHOTO: Human and Natural

These countries include Cote d’Ivoire in the West of Africa and Ethiopia, Mozambique and Tanzania in the East.

“In Cote d’Ivoire, a strong increase in cocoa production and rice output boosted agriculture growth and helped to sustain the country’s high growth. Ethiopia’s robust growth continued to be supported by agriculture, as well, and by public investment, particularly in infrastructure,” the World Bank said.

(READ MORE: Ethiopia’s impressive economic growth)

“Inflation rates edged up in a number of countries, but were more of a concern in the frontier market countries that also sustained large currency depreciations – notably Ghana. In a few cases, including Ghana and Zambia, the fiscal position remained weak due to increasing current expenditures.”

However, growth has slowed in South Africa, the region’s second largest economy, due to structural issues and low investor confidence, while economic activity strengthened in Nigeria – the largest economy in Africa.

According to the World Bank, despite weaker than expected global growth, African economies continue to expand at a moderately rapid pace, with regional GDP growth projected to strengthen to 5.2 per cent yearly in 2015-2016 from 4.6 per cent in 2014.

This is mainly due to significant public investment in infrastructure, increased agricultural production and expanding services in African retail, telecoms, transportation and finance.

Francisco Ferreira, the World Bank’s chief economist for Africa, said, “Overall, Africa is forecast to remain one of the world’s three fastest growing regions and to maintain its impressive 20 years of continuous expansion.”

“Downside risks that require enhanced preparedness include rising fiscal deficits in a number of countries, economic fallouts from the activities of terrorist groups such as Boko Haram and Al Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa,” he added.

(READ MORE: World Bank announces $170 mln in new funding to fight Ebola)

The international financial institution also stated that economic transformation will become more critical, with extractive industries in the natural resources sector and a surging services industry propelling Africa’s growth.

World Bank lead economist for Africa and co-author of Africa’s Pulse, Punam Chuhan-Pole, believes that that the pattern of growth and economic transformation has implications for cutting poverty rates in Africa.

“Nearly two decades of strong growth is transforming Africa’s economies, but the structural change is not what the world expected. The majority of Africa’s jobs continues to be in agriculture and is surging into services - but not into industry and manufacturing,” she said.

“The good news is that in Africa this growth in agriculture and the services sector has been more effective in reducing poverty than growth in industry. In the rest of the world, by contrast, industry and services have a larger impact on reducing poverty.”

(READ MORE: Africa will not meet extreme poverty target)

Chuhan-Pole added that investments in rural public goods and services, including in small towns, are fundamental tools for boosting rural economies and jobs.