The Economic Report on Africa 2013 shows that the continent experienced growth of up to 5 percent in 2012.
The report was released on Monday at the opening of the 6th Annual Meeting for Ministers of Economy and Finance and Economic Development, organized by the African Union Commission and the Economic Commission for Africa, in Abidjan, Ivory Coast.
The report, titled “making the most of Africa’s commodities”, focuses on Africa’s potential to use its natural resources to industrialize, create jobs and eventually achieve economic transformation.
It credits the 5 percent growth on the strengthening of domestic demand associated with rising incomes, urbanization, increase in public spending especially on infrastructure, bumper harvests in agriculture and the tightening of trade and investment ties with emerging economies.
The report however indicates that average growth across the continent slipped in 2011 due to political instability in North Africa, but was able to rise again in 2012. It also predicts further growth in the next two years, indicating the likelihood of 4.8 percent in 2013 and 5.1 percent in 2014.
According to the report, East Africa’s real per capita Gross Domestic Product (GDP) growth was more than three percent. This is regardless of the fact that the region’s growth slipped from 6.3 percent in 2011 to 5.6 in 2012. But, individual countries in the region are said to have done well due to recovery in agriculture, domestic demand and expansion of the service industry.
In Uganda, growth is credited to a cautious macroeconomic approach which meant tightened monetary policy that aided a reduction in inflation. Headline inflation in the country stands at 3.4 percent, according to the Bank of Uganda, compared to 25.4 the same month in 2012.
The report points out that though infrastructural advancement is still a challenge continent-wide, recent discoveries in the extractives sector, especially petroleum products in the East African region, are likely to expand fiscal space as well as public spending.
Growth in the region is also challenged by rural poverty, income inequality and youth unemployment.
In her opening speech at the 6th annual conference on Monday, Dr. Nkosazana Dlamini Zuma, the Chairperson of the African Union Commission said that Africa should start considering natural resources as a blessing, and this, coupled with a focus on enhancing the human resource, should lead the continent to global competitiveness.