African economies will grow 4.5 percent this year and 5 percent in 2016, approaching levels last seen before the 2007 global financial crisis, as economic prospects improve worldwide, the African Development Bank (AfDB) said.
The AfDB estimates that Africa’s gross domestic product expanded by 3.9 percent in 2014 despite sharp falls in international commodity and oil prices, an Ebola epidemic and pockets of political instability and armed conflict.
“If you ask me today what I think of events affecting Africa and African economies in 2014, I would say the lesson pertaining is resilience in the face of global adversity,” the AfDB’s chief economist Steve Kayuzzi-Mugerwa said.
“And prospects for 2015 are pretty good,” he said at a presentation of the African Economic Outlook report at the start of the bank’s annual meetings in Abidjan, Ivory Coast.
The AfDB is a multilateral lender set up in 1964 to promote sustainable economic growth and reduce poverty in Africa.
In the years prior to the global crisis, African economic growth averaged between 5 and 7 percent.
Returning to those levels over the next two years will depend largely on a continued recovery in major economies that is stimulating demand for Africa’s exports, the report said.
Africa’s rebound is also likely to be uneven, added the report, published in partnership with the Organisation of Economic Co-operation and Development and the United Nations Development Programme.
North Africa, which saw growth of just 1.7 percent in 2014, due in part to the crisis in Libya, will see its economy expand by 4.4 percent in 2016. Southern Africa is on track to record growth of 3.5 percent that year, up from its 2014 level of 2.7 percent.
Economic growth in West and Central African will accelerate slightly, from 6 and 5.6 percent respectively in 2014 to 6.1 and 5.8 percent in 2016, while East African growth is set to slow from 7.1 percent in 2014 to 6.7 percent in 2016.
Financial inflows will increase nearly 7 percent to $193 billion this year, supported by higher foreign direct investment and a spike in portfolio investments, the bank said.
Foreign direct investment is expected to reach $55.2 billion this year up from an estimated $49.5 billion in 2014. Portfolio investments will jump more than 36 percent to $18.4 billion this year from an estimated $13.5 billion in 2014.
“Since 2011, more than a dozen countries, including Kenya, Nigeria and Uganda, have issued international sovereign bonds for the first time with the objective of financing large infrastructure projects,” the report said.