African economy grows faster under positive climate
NAIROBI, June 26 (http://www.hiiraan.org/2005/june/somali_news26_2.htm) -- Africa's economy is growing at a faster speed of over 5 percent, according to a recent report, which, analysts say, is being supported by a good number of favorable internal and external environment conditions.
Africa's economic growth rose from 4.1 percent in 2003 to 5.1 percent in 2004, the highest since 1996, according to a report issued in May by Africa Development Bank.
2003 and 2004 have been the first two consecutive years during the past 20 years that boasted the growth of over 4 percent, said the report, and various financial institutions made bold forecast that Africa will sustain such high growth in the following two years.
Peace and stability, proper macroeconomic policy, global economic recovery, and oil and gas exportation, were numbered as the most important factors that promoted Africa's development, analysts have said.
Peace and security provided the basis for the economic development in Africa as conflicts that have continuously beset many countries or regions began to settle down through the effortsof African countries and with the help of the international community.
In January, the Sudanese government and the southern rebels signed an overall comprehensive peace accord, concluding Africa's longest civil war which claimed over 2 million lives.
Besides, the chaotic Horn of Africa nation, Somalia, has elected new president and parliament, making up the transitional federal government in Kenya last October, and the exiled government has returned home recently, promising to restore peace and reconstruct the economy.
In west Africa, the situation in Liberia is stable and the reconstruction work is smooth since it formed the transitional government in 2003, ending 14 years of civil war.
Also, good for Africa, the warring parties in Cote d'Ivoire also signed a peace agreement in South Africa this year, agreeing to cease the two-year long civil conflict and disarm the soldiers.
Experts say the easing of conflicts and the more stable securityconditions paved the way for the development in Africa, the poorest continent in the world, and more foreign direct investmentcould thus be expected under this situation.
In addition, most African countries adopted proper macroeconomic policy and made adjustment to the economic structure,which added dynamic to the growth and reshaped the system for growth.
Improved management in finance and foreign exchange rates, among others, have strengthened African countries' economic basis,and consolidated their abilities to defend the external risks, experts believed.
Progress is being made to control the inflationary and financial deficit, with sharp decrease in the revenue deficit in many African countries in 2004, realizing the first-ever balance in the recent decades.
Meanwhile, the total export amount of the African countries increased 6.7 percent in the past year, and the African economies are also being boosted with governments' more focus on private sectors, particularly in energy and telecommunication.
The generally good outlook of the African economy was also due partly to the gradual recovery of the world economy, especially the increasing global demand for Africa's raw materials, which leads to a rise in the price and serves as catalyst for the continent's development.
At present, the crude oil produced in Africa exceeds 10 percentin the world's oil output, alongside with the soaring oil prices. Africa has benefited and is going to make bigger profits from oil export.
Since the rising investment of the multinational corporations in the oil-rich Guinea Area, Africa has become one of the most rapid growing regions in oil exploration. In addition, minerals, gold, coffee, tea and cotton all obtained fast growing export revenues.
According to the 2004 World Investment Report released by UN's trade and development convention, the foreign direct investment attracted by Africa in 2003 rose 28 percent compared with 2002, reaching 15 billion US dollars, which is a big improvement in recent years.
Statistics show that the oil producing countries in Africa achieved economic growth of over 5 percent in 2004, with the back of hiking crude oil prices and exploration in the new oil fields, which made contribution to Africa's overall development.
The top oil producer in sub-Saharan countries, Nigeria, throughbetter management of its oil sector and a promotion of its agricultural and manufacture industries, obtained 6.1 percent of economic growth in 2004.
South Africa, the economic powerhouse in Africa, also secured 3.7 percent growth as it implemented positive and stable financial policy, supplemented by the soaring price of mineral products and rising domestic consumption demand, as well as other factors.
Among the biggest economies in Africa, Egypt came third with 4.1 percent growth in 2004, which was attributed to the stronger competitiveness of its commodities' export, favorable balance in international trade, as well as increase in foreign exchange reserves. Enditem

Source: hiiraan., June 26, 2005

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