Africa's economy grew by 4,3% in 2001: UN

Source: SABC

http://www.sabcnews.com/africa/southern_africa/0,1009,38733,00.html

Africa's economy grew by 4,3% last year, fuelled by strong agricultural production, higher than expected exports and the end of conflicts in a handful of countries, a United Nations commission said in a report released today.

The growth comes despite a global economic slowdown after the September 11 attacks on New York and Washington, which were expected to lower commodity prices and reduce the amount of foreign investment in the continent, said the UN Economic Commission for Africa in its annual report. Yet the global slowdown had "a much less pronounced impact" on Africa, the commission said. Output remained relatively strong and Africa's overall economic growth increased from 3,5% in 2000 to 4,3% last year, the report said.

"Africa grew faster than any other developing region in 2001, reflecting better macro-economic management, strong agricultural production, higher than expected exports to the US and the cessation of conflicts in several countries," the report said.

The commission cautioned that despite the continent's overall economic growth last year, economic performance varied wildly in parts of Africa, with Equatorial Guinea's economy growing 65% while Zimbabwe's economy shrank by 7,5%. However, the number of African countries with economic growth exceeding 3% jumped from 26 in 2000 to 37 last year, indicating that "most African countries appear to be converging towards growth rates above the traditional 3% with positive implications for poverty reduction."

Economic growth, however, remains fragile throughout most parts of the continent and, at current rates, African countries will not achieve the UN Millennium Summit goal of halving poverty by 2015, the report said. The economic performance of seven countries was surveyed in the report.

In southern Africa, Zimbabwe's political instability contributed to a deteriorating economic situation with 75% of the population living in poverty as unemployment and inflation continue to rise, the report said.

In contrast, neighbouring South Africa's "macro-economic fundamentals were robust in 2001," - a situation marked by low external borrowing and sound financial sector oversight, the report said. In eastern Africa, Ethiopia has managed economic reforms well, the report said. Neighbouring Kenya, however, is mired in pre-election uncertainty and locked out of multilateral lending since 2000 because of corruption concerns - the country registered "only anemic economic growth in the last 5 years," the report said.

The Western African state of Guinea has made "tremendous progress" in moving from a command to a market economy, liberalising exchange rates, deregulating prices and interest rates and restructuring its financial sector, the report said. - Sapa-AP