Freight volumes in and out of Africa are expected to continue growing, according to the World Bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects. “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,” says Francisco Ferreira, the World Bank’s chief economist for Africa. There will be continued “moderately rapid” growth, with regional GDP growth projected to strengthen to 5.2% a year in 2015-16 from 4.6% in 2014. African countries have succeeded in diversifying their economies in order to continue growing during a period of lower commodity prices and lower foreign direct investment as a result of subdued global economic conditions. Significant public investment in infrastructure, increased agricultural production and expanding services in African retail, telecoms, transportation and finance are expected to continue to boost growth in the region, says the report. However, primary commodities continue to account for threequarters of sub-Saharan Africa’s total goods exports. “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,” says Ferreira. In contrast to much of the rest of the continent, growth “slowed notably in South Africa, the region’s second largest economy, due to structural issues and low investor confidence,” says the report. World Bank estimates put South African economic growth at a “modest 1% 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% year-on-year in the second quarter, up from a 6.2% in the first quarter. Growth also remained robust in many of the region’s low-income countries, including Cote d’Ivoire, Ethiopia, Mozambique and Tanzania. Big increases in cocoa and rice production in Cote d’Ivoire boosted agriculture growth and helped to sustain the country’s high growth. Ethiopia’s robust growth continued to be supported by agriculture, as well as 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. INSERT 1 6.5% Nigeria’s year-on-year GDP growth in the second quarter. INSERT 2 1% South Africa’s year-on-year GDP growth in the second quarter
