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Africa's economy projected to grow 4.4 percent in 2016: UN Report

Xinhua, January 27, 2016 Adjust font size:

Africa's economic growth has been forecast to grow 4.4 percent in 2016, up from 3.7 percent in 2015, said a UN report released on Tuesday in Ethiopia's capital Addis Ababa.

Increasing domestic demand coupled with an improving regional business environment and increasing public investment, especially in infrastructure, underpin the set economic growth on the continent, according to the report.

Africa's growth will rely on other factors including improving macroeconomic management, a buoyant service sector, and increasing trade and investment ties with emerging economies; and these factors are also expected to support regional growth in 2017, said the report.

Speaking to the press conference on the report, Adam Elhiraik, Managing Director of Macroeconomic Policy Division at the UN Economic Commission for Africa (UNECA), said there is optimism that African countries would manage their economies well.

"Africa will accelerate growth to 4.4 percent; so, still we are optimistic," he said.

The report said East Africa maintained the highest growth rate in the region at 6.2 percent in 2015 with a projected increase to 6.8 percent in 2016.

The growth rate in East Africa is expected to be mainly driven by the increased inflow of foreign direct investment (FDI), increased public spending on infrastructure and growing domestic markets.

However, the political uncertainties and instabilities in South Sudan and Burundi, and terrorism threats in Kenya and Somalia, have been weighing on the sub-region's growth.

West Africa's growth is projected to increase to 5.2 percent and 5.3 percent in 2016 and 2017 respectively, driven mainly by the improving economic performance of Nigeria, with its emphasis on the growing non-oil sectors.

Growth in West Africa decreased to 4.4 percent in 2015, based on a considerably lower growth rate in Nigeria following a weaker oil sector and the uncertainty caused by the elections of March 2015, according to the report.

The consequences of the Ebola outbreak in the hardest-hit countries, namely Guinea, Liberia, and Sierra Leone, also impacted their growth potential, although Guinea and Liberia have returned to positive growth, it said.

The report forecast the Central Africa sub-region to register average growth rate of 4.3 percent in 2016, which is more than that of 2015, 3.4 percent.

The growth in the sub-region is mainly driven by investment in energy and infrastructure, strong performance of the service sector in Cameroon, an increase in oil production in Chad and the DR Congo, solid performance of the service sector, robust public investment in Chad, and investment in infrastructure and manufacturing in DR Congo, according to the report.

It also predicted that growth in North Africa to increase to 4.1 percent in 2016 from 3.6 percent in 2015.

Southern Africa's growth is forecast to increase to 3.0 percent in 2016 from 2.5 percent in 2015, and to 3.5 percent in 2017, said the report.

Stating that the economic outlook for Africa remains subject to a number of risks and uncertainties, the report said weaker global growth and weakness in commodity prices are major risks for Africa. Endit