09 August 2014, Lagos – The African Development Bank (AfDB) has said growth in sub-Saharan Africa is projected to reach 5.8 per cent in 2014, while the continent as a whole is expected to grow at between five per cent and six percent in 2015, a level maintained before the 2009 global recession.
The Bank stated in its African Economic Outlook (AEO) 2014, which was launched yesterday in Abuja. The report stated that East and West Africa achieved the fastest growth rate of more than six per cent in 2013.
It added that there had been steady progress in economic and social conditions for immediate future prospects for the continent.
The report noted that though economic growth varied widely across the continent, reflecting differences in stages of development clouding availability of natural resources, weather conditions as well as political and social stability, West Africa is expected to continue its rapid growth to more than seven per cent in 2014 and 2015.
Specifically, it said Nigeria’s growth was mainly driven by non-oil sectors, such as agriculture, trade, information and communications technology (ICT), and other services, with the oil sector accounting for 37 per cent of Gross Domestic Product (GDP) and about a fifth of government revenues.
However, it noted that crude oil theft and pipeline vandalism as well as weak investment currently constitute a drag in growth estimates.
Also, the AEO noted that remittances constituted the largest single external flow to Africa reaching about $62.9 billion in 2013 compared to about $60 billion in 2012.
Speaking at the launch, AFDB Country Director in Nigeria, Mr. Ousmane Dore, said Nigeria had huge potentials to draw from the gains of global value chain (GVC) to boost its economy and reduce poverty.
Nevertheless, the study posited that Nigeria could not fully reap the benefits of the GVC due to weak local technological and skill capacity, weak regulatory and institutional framework, poor infrastructure as well as weak overall global competitiveness among others.
According to the AfBD: “The challenge for African economies is to ensure that global value chains have a positive impact on socially inclusive development. Africa’s participation in global value chains is currently limited to lower value activities although opportunities exist for upgrading to higher ones.
“African countries can further integrate into global value chains by opening to trade, targeting regional and emerging markets, modernising infrastructure, promoting local entrepreneurship, and investing in education.”
Continuing, it noted:”Global value chains require additional considerations: each value chain has unique requirements; policies may be suited for integrating into global value chains but not conducive to upgrading; and unnecessary tax incentive systems can result in a loss of revenue.
“Equitable economic and social transformations and environmental sustainability remain core concerns for Africa to maximise the gains that global value chains can offer.”
The African Economic Outlook is a product of the collaborative efforts of three international partners: the African Development Bank, the OECD Development Centre, and the United Nations Development Programme. It is mainly to present the current state of economic and social development in Africa as well as project the outlook for the coming two years.
– This Day