Economies in sub-Saharan Africa will ride out the bumpy global recovery in the next few years to post growth rates not seen outside Asia, the IMF said in its latest economic forecasts Tuesday.
The International Monetary Fund’s latest World Economic Outlook predicted economic activity in Africa’s reinvigorated economies will “remain robust” this year and next.
Regional GDP is expected to increase 5.6 percent in 2013, slightly lower than previously expected, but still among the fastest rates seen anywhere in the world.
Resource-rich economies like Nigeria (7.2 percent) and growing lower-income economies like Mozambique (8.4 percent) are expected to lead the way.
Only two countries, Swaziland and Equatorial Guinea are expected to see their economies shrink.
Next year an economic resurgence in South Africa — the regional powerhouse — is expected to push sub-Saharan growth to around 6.1 percent, faster than first thought.
The South African economy, hobbled this year and last by “sluggish mining production” and a downturn in key eurozone export markets, is forecast to grow at 3.3 percent next year.
But, the IMF admits, the regional outlook for 2014 depends on improvements in the economic outlook for Europe and other key export markets.
Its warning that some African economies remain vulnerable to external shocks came as lower Chinese growth figures pummelled gold prices.
The largest drop in the precious metal’s spot price in three decades sent the Johannesburg Stock Exchange down 1.6 percent on Monday, with many major producers taking a beating.
“The main risks to the outlook for sub-Saharan Africa stem from the external environment, although domestic security and political risks should not be discounted,” the report stated.
“Given the still-uncertain global environment, countries whose policy buffers are thin and where growth is strong should seek to rebuild fiscal position.”
The IMF said growth came in slightly lower than October forecasts thanks to the impact of floods on Nigerian output and labour stoppages in South Africa.
In 2012 South Africa was rocked by a series of deadly labour strikes, which mine owners estimated cost the economy around $1.2 billion.
Violent conflict also curbed growth, and remains a threat, the IMF said.
Oil exports from South Sudan where interrupted and the economies of Mali and Guinea-Bissau were hit by conflict.
“On the positive side, Angolan oil production strengthened, and Ivory Coast experienced a sharp rebound in economic activity after the election-related disruptions of 2011.”
The IMF encouraged a continuation of spending to improve infrastructure and boost production capacity, both of which have helped fuel the rise of African consumers.
On average urban Africans already spend more on apparel and food than those in Brazil, China and India, according to a recent McKinsey & Company study.
While the price of basic goods continues to increase apace in many African nations, particularly oil producers Nigeria and Angola, the IMF urged others to take advantage of moderate inflation.
“The success in reducing inflation has provided room for a gradual easing of the monetary policy stance in several countries,” it said.