PARIS (AFP) – Sub-Saharan Africa has largely risen above a global slowdown triggered by the eurozone debt crisis, the International Monetary Fund said on Tuesday, but the continent’s most developed economy in South Africa gives cause for concern.
African nations will grow by 5.4 percent in 2012, the IMF said in its bi-annual world outlook report, pushed by oil exports, high commodity prices, and increased trade with China.
“Sub Saharan Africa has recorded another year of strong growth and was one of the regions least affected by recent financial turmoil and deterioration in the global outlook,” the International Monetary Fund said.
Most countries were protected from direct shocks from the eurozone debt crisis, the Washington-based institution said.
But the IMF warned that both middle-income countries on the continent and oil producing nations, being the most integrated to the world economy, would be the most affected if the eurozone debt crisis took a lasting turn for the worse in 2012.
With the debt crisis, middle-income countries like South Africa already saw large downward revisions to their growth, “reflecting their stronger trade and financial ties with slowing Europe.”
South Africa would now grow by 2.7 percent in 2012, the IMF said. And with a weaker global demand for diamonds, growth in Botswana would reach 3.25 percent in 2012, a drop of more than half a percentage point from earlier forecasts.
Exposed to the global economy through production of high quality goods, South Africa especially could transmit global shocks to the rest of the region through its effect on migrant workers’ incomes, trade and regional investment, the IMF said.
Barring any unexpected shocks, oil producing nations would remain dynamic, the IMF said, especially Angola where new oil fields coming on-stream would bring growth to 9.75 percent this year. Nigeria would grow 7.0 percent.
In Eastern Africa and the continent’s poorer economies, fighting inflation should remain a policy priority, the IMF said though it added that price pressures had begun to abate in much of the continent.
Kenya is expected to grow by 5.25 percent in 2012, spurred by a rebound in agricultural output and in hydroelectricity generation following a drought last year, the IMF said.
The IMF urged budgetary discipline in the region, which would “help generate the room needed to refocus spending on priority areas such as infrastructure, health, and education”.
The IMF said the region was overall pushing away from its dependence on former colonial powers in the European Union as well as the United States for trade.
“Exports to the euro area now account for only one fifth of the region’s exports, down from nearly two-fifths in the early 1990’s,” the IMF said.
In 2011, more than half of trade not going to the EU or the US was with China, IMF data showed.