With investors continuous forage into the continent, the World Bank’s bi- annual analysis of the issues shaping Africa’s economic prospects, Africa’s Pulse report, expects Foreign Direct Investment (FDI) inflows to Africa to hit $31 billion in 2012 and $48.7 billion by 2014.
It predicted a 4.8 per cent growth rate for sub-Saharan Africa by the end of 2012 but cautioned countries to be prudent in spending their resources wisely and to focus on public investment.
Shantayanan Devarajan, the World Bank’s chief Africa economist said, “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.”
The global financial institution its report released yesterday also predicted that Africa’s largest oil producer, Nigeria, could keep supplying at the 2011 levels for another 41 years while Angola, the second largest producer in the continent has about 21 years at current production levels before its reserves would be exhausted.
The World Bank believes Africa is still on track despite global economic setbacks. It says growth in sub-Saharan Africa, apart from South Africa, will rise to six per cent in 2012. Countries such as Mozambique, home to some of the world’s biggest untapped natural gas reserves, and mineral rich cum iron-ore exporting Sierra Leone are expected to perform strongly.
“A third of African countries will grow at or above six per cent with some of the fastest growing ones buoyed by new mineral exports such as iron ore in Sierra Leone, uranium and oil in Niger, and by factors such as the return to peace in Cote d’Ivoire, as well as strong growth in countries such as Ethiopia,” World Bank Vice-President for Africa, Mukhtar Diop.
The report indicated that although African exports rebounded in the first quarter of 2012, at an annualised pace of 32 percent, up from 11 percent 2011; the continent is still vulnerable to the recent cases of market volatility occasioned by crisis from the Euro area and the growth slowdown that is occurring in China, which had remained an important market for Africa’s mineral exporters.
Should China not succeed in engineering a soft landing, “demand for and prices of major metals and minerals could decline significantly,” it stated.
The international financial institution stated in the report that , 22 of Africa’s 48 countries have officially achieved middle-income status, while another 10 could reach middle-income status by 2025 if current growth trends persist.
While ascribing high commodity prices and an increase in exports from countries that have made mineral discoveries as the major source of growth in the continent in 2012, the report says new discoveries of oil, gas, and other minerals in the continent would continue to generate a wave of significant mineral wealth in the region.
It also noted that child mortality and poverty rates in the continent has declined faster than one percentage point a year and for the first time, between 2005 and 2008, but cautioned that recent spikes in food and grain prices had become worrisome given that Africa’s Sahel region was already suffering from higher food prices, high rates of malnutrition and persistent crisis and insecurity.