THE World Bank Group has warned that if needed action is not taken to check the activities of terrorist groups such as Boko Haram, Al Shabaab and the onslaught of ebola virus, the economic fallouts may derail the continent’s growth path.
According to Francisco Ferreira, the World Bank’s Chief Economist for Africa, ”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”. He said the, ”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.”
According to him A World Bank study of the likely economic impact of Ebola, released last month, suggested that if the virus continues to spread in the three worst-affected countries, its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states of Guinea, Liberia and Sierra Leone. The World Bank Group he said is mobilizing a $400 million financing package for the countries hardest hit by the crisis.
The Bank said that growth trends in Africa slowed notably in South Africa, the region’s second largest economy, due to structural issues and low investor confidence. The South African economy expanded a modest 1.0 percent year-on-year in the second quarter of 2014, its lowest growth rate since the 2009 financial crisis. By contrast, economic activity strengthened in Nigeria, the region’s largest economy. GDP advanced 6.5 percent year-on-year in the second quarter, up from a 6.2 percent expansion in the first quarter. Growth also remained robust in many of the region’s low-income countries including notably Cote d’Ivoire, Ethiopia, Mozambique, and Tanzania. In Cote d’Ivoire, for example, 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.
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, led by rising wage bills, and in some cases weaker revenues. Large fiscal deficits are reducing fiscal buffers and affecting these countries’ ability to respond to exogenous shocks. Economic transformation will become more critical: in a special study of Africa’s patterns of structural transformation and poverty dynamics, Africa’s Pulse finds that the region is largely bypassing industrialisation as a major driver of growth and jobs.
Instead, the study says, extractive industries in the natural resources sector and a surging services industry are propelling
According to Francisco Ferreira, the World Bank’s Chief Economist for Africa, ”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”. He said the, ”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.”
According to him A World Bank study of the likely economic impact of Ebola, released last month, suggested that if the virus continues to spread in the three worst-affected countries, its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states of Guinea, Liberia and Sierra Leone. The World Bank Group he said is mobilizing a $400 million financing package for the countries hardest hit by the crisis.
The Bank said that growth trends in Africa slowed notably in South Africa, the region’s second largest economy, due to structural issues and low investor confidence. The South African economy expanded a modest 1.0 percent year-on-year in the second quarter of 2014, its lowest growth rate since the 2009 financial crisis. By contrast, economic activity strengthened in Nigeria, the region’s largest economy. GDP advanced 6.5 percent year-on-year in the second quarter, up from a 6.2 percent expansion in the first quarter. Growth also remained robust in many of the region’s low-income countries including notably Cote d’Ivoire, Ethiopia, Mozambique, and Tanzania. In Cote d’Ivoire, for example, 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.
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, led by rising wage bills, and in some cases weaker revenues. Large fiscal deficits are reducing fiscal buffers and affecting these countries’ ability to respond to exogenous shocks. Economic transformation will become more critical: in a special study of Africa’s patterns of structural transformation and poverty dynamics, Africa’s Pulse finds that the region is largely bypassing industrialisation as a major driver of growth and jobs.
Instead, the study says, extractive industries in the natural resources sector and a surging services industry are propelling
-Culled from: http://www.vanguardngr.com
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