Africa’s record economic growth puts world’s GDP at 3.6%

Rising economic growth in Africa is said to have shaped the world’s economy as the continent was not really affected during the recently experienced global financial crisis in 2009 as compared to other countries in Europe and other continents.

The World Trade Organisation (WTO) indicates that the world’s gross domestic product (GDP) has hit 3.6% as at 2010, one year after an unprecedented contraction of 2.4% that accompanied the financial crisis in 2009.

According to the WTO, this was as a result of Africa’s fastest average GDP growth rate of 4.7% between 2005 and 2010 even though South and Central America also saw vigorous growth of 5.8%, driven by Brazil’s strong 7.5% upturn.

“South and Central America also saw vigorous growth of 5.8%, driven by Brazil‟s strong 7.5% upturn. However, Africa had the fastest average rate of GDP growth of any region over the last 5 years (4.7% between 2005 and 2010)”, WTO said in a press release published on its website to give the state of the world economy and trade for the year 2010.

In volume terms, Africa’s merchandise exports rose to 6.5% in 2010 from -4.2% in 2009 while imports were also up 7.0% from -5.0% in 2009.

Meanwhile, figures from a World Bank study titled “Africa’s Pulse” for April 2011, also shows that growth in sub-Saharan Africa for instance, rebounded sharply in 2010, supported by both the global recovery and developments on the domestic front.

Excluding South Africa, the study said GDP growth in sub-Saharan Africa for 2010 was estimated at 5.8 percent, up from 3.8 percent in 2009, and above its pre-crisis average growth of 5.6 percent.

Remittance inflows to Africa, which is the continent’s largest source of net foreign inflows after foreign direct investment (FDI) quadrupled in 20 years since 1990, reaching nearly $40 billion (2.6 percent of GDP) in 2010 with FDI flows to sub-Saharan Africa as at 2010 increased by 6 percent to $32 billion in 2010.

However, the World Bank forecasts FDIs to the region to reach a record $40.8 billion in 2011.

The WTO said GDP also grew faster in developing Asia (8.8%) than in other developing regions last year, with China and India registering strong increases of 10.3% and 9.7%, respectively

It says concerns about the possibility of sovereign defaults in Greece, Ireland, Portugal and Spain brought renewed financial market instability and fiscal austerity in the second half of 2010, which held Europe’s growth rate down to 1.9%, the slowest of any region.

“Growth was stronger in the first half of the year, but weakened in the second half as the sovereign debt crisis affecting smaller Euro area economies restrained economic growth, especially in Europe”, it said.

The WTO’s forecast shows that world trade growth for 2011 will get 6.5% expansion following the record-breaking 14.5% surge in the volume of exports in 2010.

“Stability should be the name of the game for 2011”, WTO Director-General Pascal Lamy was cited in the press release as saying.

By Ekow Quandzie