Africa achieved a significant improvement in her economic performance last year. For the first time in many years, the Gross Domestic Product (GDP) growth rate in a number of countries.
As a result, there was an increase of two per cent per capita income, giving an average population growth rate of 2.8 per cent. Furthermore, improved economic performance has been widespread as a number of countries whose GDP growth rate exceeded population growth rates reached 41 as against about 20 in the early 1990s. An overview of the 1996 regional economic performance contained in the African Development Bank/Arica Development Fund’s Annual report, attributed the achievement of GDP growth rates estimated at 4.8 per cent compared with the 2.8 per cent for 1995, to the further strengthening of the process of economic recovery. According to the report, agriculture registered one of the best performances in recent years, achieving a growth rate of 6.5 per cent in 1996, as against 0.6 per cent, the previous year. The report said the third consecutive year of economic recovery was also accompanied by macro stability with continued progress in fiscal prudence and lower inflation rates. To this end, the overall budget deficit in the region was reduced to 2.9 per cent of the GDP, with Algeria and Nigeria, the two largest economies, recording budget surpluses of 0.3 and 0.7 per cent respectively.
As regards external trade, the report said in spite of the decline in major commodity prices during 1996, the value of exports grew by six per cent to about $ 116.4 billion. As domestic economic activity strengthened, however, imports grew at a slightly higher rate of 7.9 per cent to $126.16 billion. As a result, and coupled with shortfalls in net services, the current account deficit increased from $12.92 billion in 1995 to $16.12 billion last year.
Notwithstanding Africa’s debt which continues to grow and reached $320 billion last year, the ADB is optimistic about the future of the region. It therefore urges African countries growth rate of five per cent in the medium term. According to the report, macro economic stability, policy credibility and privatisation of public enterprises should increase foreign capital flow to Africa while she takes steps to ensure that she benefits from the positive developments expected in the world economy
