Africa's Growth to Accelerate Throughout 2014
Africa’s Growth to Accelerate Throughout 2014According to the 2014 African Economic Outlook report released on 19th May in Kigali, Rwanda, although African growth is projected to accelerate this year, the region may hit a peak if service delivery, tax mobilisation and integration into global value chains does not improve.
According to the report released by the Organisation for Economic Cooperation and Development (OECD), projects that Sub-Saharan Africa will grow at 4 percent through 2014, rising to a further 5-6 percent in 2015. This compares well to the global averages, which the IMF estimates to be at around 3.7 percent rising to 3.9 percent in 2015.
"It is obviously a rate of growth bigger than in North Atlantic countries, [but] if you compare with other macro-regions in the world of developing countries one should take into account that it is higher than in Latin America, where it is below 3 percent, but lower than in Southeast Asia, where it is around 5.4," says Mario Pezzini, director of the OECD Development centre.
North Africa will exhibit the least growth at 1.9 percent, reflecting "the long wave of the Arab Spring" revolutions which have toppled several governments in the region since 2010, according to Mr Pezzini. East and west Africa are expected to grow fastest, despite tenuous security situations in respective regional power players Kenya and Nigeria.
However, diversification of economies away from dependence on non-renewable natural resources for growth remains a slow process. While Africa's share of value-added intermediate products has increased in relative terms over the past two decades – from 1.4 percent of global trade to 2.2 percent – these numbers are still very low.
"The next step should be being much more present in manufacturing production, in structural transformation, in intermediate goods production, and therefore acquiring more weight in the global value chain," Mr Pezzini explains.
Africa's overall lack of infrastructure development continues to be a major obstacle – contributing not only to low levels of productivity for enterprises based in Africa making them difficult to incorporate into global value chains. If left unaddressed, this could have a serious dampening effect on Africa's growth story.