Africa economy set for rebound

Recent unrest in Liberia will damage growth prospects

The African economy is set for a rebound in 2003 after a weak performance last year, according to the latest report from the UN Economic Commission for Africa (ECA).

However, the report also warned of a number of risks to Africa's prospects, including the current unrest in Liberia and Zimbabwe, and the threat of flooding in various parts of the continent.

The ECA forecast average growth of 4.2% in 2003, against 3.2% in 2002 and 4.3% in 2001.

Last year only five of Africa's 53 countries achieved key targets or Millennium Development Goals on poverty, agreed in a United Nations declaration in September 2000.

Risks

A slower than expected recovery in world trade, drought, the Aids epidemic and war, were all blamed for Africa's weak performance in 2002.

Top Performers Botswana South Africa Mauritius Namibia Tunisia

The ECA predicted funds would be redirected in 2003 from military spending to development in key areas such as the Democratic Republic of Congo, Angola, Ethiopia and Sudan thanks to progress on stabilising these war-ravaged economies.

But it cautioned that new threats to Africa's growth were now forming in the political troubles of Zimbabwe and the Ivory Coast, renewed flooding in the Horn and southern Africa, inflationary pressures in South Africa and the threat of extreme weather.

Worst Performers Congo Zimbabwe Chad Guinea Nigeria

"The failure of the Doha Development Round of trade negotiations to provide immediate duty-free and quota-free access to the poorest countries also hampers Africa's exports," said the report.

"At the same time, the US decision to introduce a six-year $51.7bn farm bill boosting crop and dairy subsidies will reduce agricultural prices, making it difficult for small African countries to compete."

Regional strengths

Some African countries, however, are set to continue their solid performance, said the ECA.

"Well-managed countries, with solid reform agendas and good governance performed well," it said.

Top performers have lower foreign debt, lower budget deficits and lower interest rates.

Mozambique, for example, saw growth of 12% - amongst the fastest in Africa.

Ethiopia, Rwanda and Uganda also grew by over 6% in 2002.

The report predicted growth of 4.9% in north Africa for 2003, 4.4% in central and east Africa, 3.6% in southern Africa and 3.3% in west Africa.

It predicted negative growth of 4.6% in Zimbabwe because of the political crisis.