A UN report released on Wednesday in Addis Ababa, predicted Africa economy to grow up to 4.4 per cent in 2016, up from 3.7 per cent in 2015.
Adam Elhiraik, Managing Director of Macroeconomic Policy Division at the UN Economic Commission for Africa (UNECA), expressed the optimism during the presentation of the report, urging African countries to manage their economies well.
“Africa will accelerate growth to 4.4 percent; but still, we are optimistic that it need to be well managed,” he said in the report.
He said increasing domestic demand coupled with an improving regional business environment and increasing public investment, especially in infrastructure, underpin the set economic growth on the continent.
According to the report, Africa’s growth will rely on other factors including improving macroeconomic management, a buoyant service sector, increasing trade and investment ties with emerging economies; and these factors are also expected to support regional growth in 2017.
Elhiraik said that East Africa maintained the highest growth rate in the region at 6.2 per cent in 2015 with a projected increase to 6.8 per cent in 2016.
He said the growth rate in East Africa was expected to be mainly driven by the increased inflow of Foreign Direct Investment (FDI), increased public spending on infrastructure and growing domestic markets.
Elhiraik, however, said the political uncertainties and instabilities in South Sudan and Burundi, and terrorism threats in Kenya and Somalia, had weighed on the sub-region’s growth.
He said West Africa’s growth was projected to increase to 5.2 per cent and 5.3 per cent in 2016 and 2017 respectively, driven mainly by the improving economic performance of Nigeria, with its emphasis on the growing non-oil sectors.
Elhiraik said the report pointed out that the growth in West Africa, decreased to 4.4 per cent in 2015, based on a considerably lower growth rate in Nigeria, following a weaker oil sector and the uncertainty caused by the elections of March 2015.
“The consequences of the Ebola outbreak in the hardest-hit countries, namely Guinea, Liberia, and Sierra Leone, also impacted their growth potential, although Guinea and Liberia have returned to positive growth,” he said.
The report forecast the Central Africa sub-region to register average growth rate of 4.3 per cent in 2016, which is more than that of 2015 which was 3.4 per cent.
It said the growth in the sub-region was mainly driven by investment in energy and infrastructure.
It added that the strong performance of the service sector in Cameroon, an increase in oil production in Chad and the DR Congo, solid performance of the service sector, robust public investment in Chad, and investment in infrastructure and manufacturing in DR Congo.
It also predicted that growth in North Africa to increase to 4.1 per cent in 2016 from 3.6 per cent in 2015.
It made a forecast that Southern Africa’s growth would to 3.0 per cent in 2016 from 2.5 per cent in 2015 and to 3.5 per cent in 2017.
The report said even though the economic outlook for Africa remains subject to a number of risks and uncertainties, yet weaker global growth and weakness in commodity prices remain a major risks for Africa.