Africa enjoys sustained economic growth

Africa's economy is growing steadily in recent years, which, analysts say, is being supported by a great number of favorable internal and external conditions.

Global economic recovery, peace and stability, high oil and no- fuel commodity prices, and proper macroeconomic policy, were counted as the most important factors that promoted Africa's development, analysts have said.

According to the International Monetary Fund (IMF), Africa's economy registered an average growth rate of 3.5 percent from 1995 to 2003 before climbing to 5.3 and 5.4 percent respectively in 2004 and 2005.

In its latest "World Economic Outlook" which was released in Singapore last month, the IMF predicted Africa's gross domestic product (GDP) growth will stand at 5.4 percent this year and increase to 5.9 percent next year.

Sub-Saharan Africa is currently enjoying the strongest period of sustained economic expansion since the early 1970s, according to the latest IMF report.

The regional growth is expected at 5.2 percent this year, the third successive year it has exceeded five percent, the IMF said. It also predicted that the growth rate for the region would reach 6.3 percent in 2007 as oil output recovers in Nigeria and new oil fields in Angola and Equatorial Guinea come on stream.

The gradual global economic recovery has created a good external environment for Africa's development, especially the increasing global demand for Africa's raw materials which leads to a rise in the price, and serves as a catalyst for the continent's development.

Peace and security also provided a basis for the economic development in Africa as conflicts that have continuously beset many countries or regions began to settle down through the efforts of African countries and with the help of the international community.

Last January, the Sudanese government and the southern rebels signed an overall comprehensive peace accord, concluding Africa's longest civil war which claimed over two million lives.

In west Africa, the situation in Liberia is stable and the reconstruction work has been smooth since it formed the transitional government in 2003, ending 14 years of civil war.

Also, good for Africa, the warring parties in Cote d'Ivoire signed a peace agreement in South Africa last year, agreeing to cease the two-year-long civil conflict and disarm their soldiers.

Experts say the easing of conflicts and the more stable security conditions have paved the way for the development in Africa, the poorest continent in the world. More foreign direct investment could be expected under this situation.

Furthermore, high oil prices have contributed significantly to the strong performance of oil-exporting countries in Africa. Statistics from African Development Bank show that oil and mineral producers in Africa achieved an economic growth of eight percent in 2005, with the back of hiking crude oil prices and exploration in new oil fields.

A rise in non-fuel commodity prices has helped cushion the impact of higher oil rates for oil-importing countries. Mozambique, Zambia and South Africa have benefited from higher metal prices while Burundi, Ethiopia, Sierra Leone, Rwanda and Uganda have taken advantage of increases in the price of coffee.

In addition, most African countries adopted proper macroeconomic policies and made adjustment to their economic structure, which added dynamic to the growth and reshaped the system for growth.

Improved management in finance and foreign exchange rates, among others, have strengthened African countries' economic basis, and consolidated their abilities to defend external risks, experts believed. Progress has also been made on controlling inflationary and financial deficit, with sharp decrease in revenue deficit in many African countries in 2004, realizing the first-ever balance in recent decades.

The continent is already heading toward regional economic integration, which, experts believe, is a supportive factor to Africa's economy. Several economic blocs in the region, such as the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community, have been implementing the practice of custom unions among their member states.

Source: Xinhua