Africa will continue its economic growth into the next year, but faces increasing threats from continued political instability, youth unemployment and the global recession dragging down oil and commodity prices, a leading economist said Tuesday.
A forecast from the African Development Bank expects 4.5 percent growth across Africa in 2012 and 4.8 percent growth in 2013, with Africa to grow at an even faster pace, the bank’s chief economist Mthuli Ncube said. Post-revolution Libya should see its economy grow by 14.8 percent over that period, as normalcy returns and oil exports return to normal levels, he said.
However, the political instability caused by the Arab Spring and other concerns has weighed down the economies of North Africa, particularly Egypt, a report by the bank released Tuesday shows. And the recent coup in Mali indicates that unrest even in established democracies and other governments remains a possibility across the Sahel, Ncube said.
“If you overlay (political) exclusion with natural resources, leaders never leave,” Ncube said. “And if they do leave, they never leave quietly.”
The bank’s forecast also estimates sluggish economic growth from South Africa as well, typically a leader on the continent. It anticipates a 2.9 percent growth as the nation’s unemployment rate stands at 25 percent. The World Bank recently pegged South Africa’s growth at 2.5 percent for the coming year, on the back of lower exports and a drop in mining.
Africa has seen year-over-year economic growth while economies in Europe and the U.S. stagnant under the weight of the global recession. That has affected Africa, as tourism dollars have waned and there’s less desire to send aid to the continent, Ncube said. That also could cut back on remittances, cash sent back to the continent from those living abroad that now represents a $50 billion-a-year infusion, the economist said.
China’s economy has also begun to contract, meaning the price of oil, precious metals and other commodities exported by African nations likely will drop, squeezing budgets of export-dominated nations like Nigeria, Ncube said.
Perhaps more worrying for the continent are its demographics: Of more than 200 million young adults on the continent, less than half have jobs, according to the bank’s forecast. As Africa’s population continues to grow, job creation continues to lag far behind and will put even more pressure on countries, Ncube said. Meanwhile, universities across the continent graduate more students expecting jobs that simply aren’t there, he said.
“This continent needs to start creating jobs,” Ncube said. “There is a good part of our growth that is due to commodities and that is not good enough. Commodities don’t create a lot of jobs.”