The World Bank is forecasting an average growth rate of 6.5 percent in countries in sub-Saharan Africa over the next three years, thanks to recovery in exports, investments flows and high domestic demand.
Presenting the findings of its June 2011 edition of Global Economic Prospects, Allen Dennis, Senior Economist, at the World Bank said the bank expected the growth to be influenced largely by external and domestic factors.
Such factors that would largely lead growth on the continent include the rebound in global commodity prices, the increasing influence and contribution of the services sectors such as telecommunication and retail.
Besides, the recognition of investors of investment opportunities on the continent coupled with big leaps in domestic demand were the other factors.
Mr Dennis said the continent had seen a robust consumer demand in 2010 supported by increased farmer incomes and access to consumer credit as well as growth from the extractive sectors.
He said in the medium-term, growth would remain strong, helped by increasing business confidence in the region.
On Ghana, the report sees oil exports boosting real GDP growth to 13.4 percent this year and expected the nascent oil industry to lead the growth over the medium term.
In addition, further investments in the mining sectors, increased cocoa production and confidence in the services sectors such as construction and telecommunications are expected to push the country’s growth.
However, increased macro-economic stability remained a downside risk.
Mr Dennis said persistent increases in food prices could impact negatively on growth especially in net food importing in sub-Saharan African countries, adding to poverty, malnutrition and general riots.
There is also the issue of unpredictability in international commodity prices, especially the price of crude oil, which spike could affect export receipts and create fiscal imbalances with non-oil producing economies bearing much of the brunt.
Mr Andrews Burns, Manager of Global Macroeconomics and lead author of the report, said developing countries needed to focus on tackling country-specific challenges such as achieving balanced growth through structural reforms, coping with inflationary pressures, and dealing with high commodity prices.
In contrast, prospects for high-income countries and many of Europe’s developing countries remain clouded by crisis-related problems such as high unemployment, household and banking-sector budget consolidation, and concerns over fiscal sustainability among other factors.
The World Bank projects indicated that as developing countries reached full capacity, growth would slow from 7.3 percent in 2010 to around 6.3 percent each year from 2011-2013.
High-income countries will see growth slow from 2.7 percent in 2010 to 2.2 percent in 2011 before picking up to 2.7 percent and 2.6 percent in 2012 and 2013 respectively.