The International Monetary Fund released a report on the Sub-Saharan African region. In their analysis, the IMF expected the area to have five percent growth this year. The IMF projects another six percent growth next year.
In the IMF’s latest Regional Economic Outlook report, experts are expecting the Sub-Saharan African economies to grow by five percent. Much of this growth is related to the economies expanding exports, such as mining.
IMF analysts are looking at 5.75 percent growth next year, but cautioned global financial volatility, including inflation (high food and fuel prices) and political instability. However, they noted that the outlook for Africa is much more optimistic than in many advanced nations, which are expected to experience a sharp downturn both this year and the next.
It is also noted in the IMF report that weak Western economies could lower the demand for African exports. Officials are suggesting that African nations need to put in place firm policies in the event of slowdowns in advanced countries.
“Those projections may turn out to be too optimistic given the risks to the global economy. Those projections are based on a 4 percent growth rate for the global economy in 2011 and 2012,” said director of the IMF’s African department, Antoinette Sayeh, in an interview with Reuters.
“Those could be less if action is not taken rapidly to deal with the problems we are seeing in Europe and in the rest of the advanced economies. A significant slowdown in advanced economies will certainly impact Africa's growth, remittances that are sent from those countries to Africa, to FDI and to aid. There is now way we see Africa decoupled from what happens in the advanced countries.”
Investors in Africa are looking into different sectors that are not related to oil, gas and minerals due to concerns about downturns in importing nations. Sayeh said in a media release that businesses are moving into agriculture, infrastructure and telecommunications.