world bank projects Sub-Saharan Africa economies to grow 4.8 percent in 2012

Sub-Saharan Africa is expected to grow at 4.8 percent in 2012, broadly unchanged from the 4.9 percent growth rate in 2011 and largely on track despite setbacks in the global economy.

And according to world bank vice president for Africa Makhtar Diop An important indicator of how Africa is on the move is that investor interest in the region remains strong, with $31 billion in foreign direct investment flows expected this year, despite difficult global conditions.    

Mr diop says  A third of African countries will  grow at or above 6 percent with some of the fastest growing ones buoyed by new mineral exports such as iron ore in Sierra Leone and uranium and oil in Niger.

Meanwhile according to the World Bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects, Excluding South Africa, the continent’s largest economy, growth in Sub-Saharan Africa is forecast to rise to 6 percent.

The bank’s analysis reports that African exports rebounded notably in the first quarter of 2012, growing at an annualized pace of 32 percent, up from the -11 percent pace recorded in the last quarter of 2011.

It has noted that African countries have not been immune to the recent bout of market volatility stemming from the Euro Area crisis, as well as the growth slowdown that is occurring in some of the largest developing economies, in particular China, which remains an important market for Africa’s mineral exporters.

However, the bank says consistently high commodity prices and strong export growth in those countries which have made mineral discoveries in recent years, have fuelled economic activity and are expected to underpin Africa’s economic growth for the rest of 2012.  

With the global economy still in fragile condition, Africa’s Pulse warns that Africa’s strong growth rates could yet be vulnerable to deteriorating market conditions in the Euro-zone.

In addition, recent spikes in food and grain prices are a cause for concern.

An unprecedented hot and dry summer in the United States, Russia and Eastern Europe led to reduced yields on both maize and wheat production worldwide. 

Africa’s Sahel region is already suffering from higher food prices, high rates of malnutrition and recurring crisis and insecurity.

Furthermore, swarms of desert locusts and the ongoing conflict in The Sahel also undermine the region’s food security. 

Countries like Mali and Niger are already suffering from locust invasions with a possibility that the swarm could move to neighboring countries such as Mauritania and Chad.

This would aggravate the ability of families to find enough to eat in a region already grappling with drought and conflict.

According to the latest Africa’s Pulse, new discoveries of oil, gas, and other minerals in African countries will generate a wave of significant mineral wealth in the region, and that the economic importance of natural resources is likely to continue in the medium term in several established oil and mineral producers, thanks to the sizable stock of resource wealth and the prospects of continued, high commodity prices.

The region’s established oil producers represent less than 10 percent of the share of global reserves as well as annual production.

Nigeria, the largest regional producer, can keep supplying at 2011 levels for another 41 years, while Angola, the second largest producer in the region, has about 21 years remaining at current production levels before its known reserves are depleted.

Given the size of these reserves, it is likely that the dependence on oil resources in these countries is likely to continue in the near to medium term.

Production in new mineral countries such as Ghana, Mozambique, Sierra Leone and Uganda could last for a substantial number of years as well.

African countries share in global reserves and annual production of some minerals is sizeable.

In 2010, Guinea alone represented over 8 percent of total world bauxite production; Zambia and the Democratic Republic Congo have a combined share of 6.7 percent of the total world copper production; and Ghana and Mali together account for 5.8 percent of the total world gold production.  

World Bank’s Chief Economist for Africa, and lead author of Africa’s Pulse Shantayanan Devarajan, says Resource-rich African countries have to make the conscious choice to invest in better health, education, and jobs, and less poverty for their people because it will not happen automatically when countries strike it rich

In its wide-ranging analysis of new developments in Africa, the new report notes that after ten years of high growth, an increasing number of countries are moving into ‘middle- income’ status, defined by the World Bank as those countries achieving more than $1,000 per capita income.

Africa’s Pulse also notes that with rapid population growth Africa is urbanizing rapidly, with deep implications for social and economic opportunities.

Urbanization and development go together.

Poverty rates on the continent have been falling faster than one percentage point a year and for the first time, between 2005 and 2008, the absolute number of people living on $1.25 a day fell.

It also notes that Child mortality has also been declining.