From Africa Recovery, Vol.16 #4 (February 2003), page 24

ECONOMIC GROWTH
Africa to grow by 4%

In 2003, economic growth in Africa is expected to accelerate to 4 per cent, from just 2.9 per cent last year. The World Economic Situation and Prospects 2003, released in January by the UN's Department of Economic and Social Affairs (DESA), reports that this projection is based largely on more rapid expansion in several of the continent's largest economies -- such as South Africa and Algeria -- as well as further consolidation of the domestic economic recovery that some countries experienced in 2002. The forecast also hinges on several other factors: no major disruptions in global economic activities as a result of a possible war in Iraq, a modest recovery in commodity prices for some African exports and no new major droughts or armed conflicts.

Such external factors also played a role in 2002's disappointing growth, notes the DESA report, down slightly from 3 per cent the year before. This was due mainly to weak external demand for African exports, depressed prices for many primary commodities, severe drought in eastern and southern Africa and economic and political instability in several of Africa's largest economies.

Contrary to the trend in recent years, the large economies of North Africa performed less well than those of sub-Saharan Africa. Both Algeria and Libya had slow growth due to oil production cuts resulting from lower quotas in the Organization of Petroleum Exporting Countries. Tourism in Morocco, Tunisia and Egypt still felt the negative effects of the 11 September 2001 terrorist attacks in the US, and North African exports suffered overall from reduced demand in Europe, the region's main trading partner. Overall, growth in North Africa was just 1.9 per cent.

Meanwhile, sub-Saharan Africa (excluding Nigeria and South Africa) grew by 3.7 per cent in 2002. This growth, however, was highly uneven, with a number of countries, especially in Southern Africa, suffering from severe drought. Zimbabwe, which has been hit by drought, poor economic management and political conflict, saw its economy shrink by 12 per cent, for the third consecutive year of economic contraction.

One hopeful sign for future economic growth, notes DESA, has been progress over the past year in settling several of Africa's more persistent conflicts, including those in Angola and Sierra Leone, and progress in peace negotiations in Burundi, the Democratic Republic of Congo, Somalia and Sudan.

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