The African Development Bank (AFDB) group and its partners have produced two reports showing Africa’s growth potential if the countries formed cross-border ties to deal with traditional and emerging partners like China, India amongst others.
The African Economic Outlook and the African Competitiveness reports are aimed at sensitizing African countries on areas requiring improvement in order to sustain their economies.
However, there challenges affecting the growth like the recent political events in North Africa, high food prices and the hike in fuel prices are likely to slow the continents growth down to 3.7% this year.
Due to the ongoing better performances in some economies, the report predicts that sub-Saharan Africa will grow faster than the North part of the continent at rebound of 5.8% in 2012.
On Rwanda, the report reveals that the country’s economic prospects for the medium term remain positive in spite of some challenges. Yet in the absence of major adverse effects from the global economy, the forecast is a real Gross Domestic Product (GDP) growth rate of 7.0% this year and 6.8 % for next year.
The director of general planning, in the ministry of finance and planning, Leonard Rugwabiza affirmed that the rebound is driven mainly by increased exports, expansion in the growth of services and construction sector.
However, the country’s continued dependence on a few export commodities represents serious constraints and the mobilization of domestic resources to finance investments remains low.
“This is why we need to concentrate more on other sectors like tourism and mining that have more potential’,” he remarked.
AFDB resident representative Negatu Makonnen noted that he was hopeful of the continents economic growth despite a small dip in growth during the global financial crisis.
“Africa staged a quick and strong comeback between 2001 and 2010 growth in averaged GDP of 5.2% annually,” he said.
Nevertheless, Makonnen added that the key challenge for the continent is turning the ongoing recovery into strong sustained and shared growth that will lead to notable improvements in people’s lives.
One of the ingredients is a country’s ability to seize opportunities from the global economy. “African economies must continue developing economic environments that are based on productivity enhancements enabling national economies and ensuring solid economic future.”
This means keeping a clear focus on strengthening the institutional, physical and human capital prerequisites for a strong and competitive private-sector-led development.
In order to achieve this, countries are required to focus in particular on policies and interventions that open up opportunities for entrepreneurship and employment for all members of society.
Governments on the other hand have a role to play especially in creating an enabling environment as well as indentifying and removing obstacles to high potential sectors and industries.
Leave a Reply