Benefits of high commodity prices spill over into other sectors

The windfalls from high commodity prices have started spilling over into other sectors in many African countries, according to the World Bank’s 2009 Global Economic Prospects report. “Growth is spilling over to other sectors outside oil and mining, as part of the windfall is spent. In Nigeria, the non-oil economy is booming, despite continued unrest in the Niger Delta that caused oil output to drop 11.2% in the second quarter of 2008,” according to the report. Despite underperformance in the oil sector, second-quarter growth accelerated to 6.7%, from 5.5% in the first, as output in non-oil industries picked up to 8.5%, mainly on strong growth in agriculture, trade, and telecoms, which together accounted for 95% of non-oil growth. In Angola, GDP growth remained robust in the first half of the year, and growth in the non-oil sector will approach 20% in 2008, marginally down from 21.5% in 2007, as the construction, agriculture, and communication sectors continued to expand at “an impressive pace,” says the report.