The economic outlook for Sub-Saharan Africa (SSA) is positive, with growth rising to 5.3% in 2012, and 5.6% in 2013, over the pre-crisis average level of 5%. This forecast would change in the event of a deteriorating global economy. Excluding South Africa, the continent’s largest economy, growth in Sub-Saharan Africa is forecast to rise to 6%. Read More »
The economic outlook for Sub-Saharan Africa (SSA) is positive, with growth rising to 5.3% in 2012, and 5.6% in 2013, over the pre-crisis average level of 5%. This forecast would change in the event of a deteriorating global economy. Excluding South Africa, the continent’s largest economy, growth in Sub-Saharan Africa is forecast to rise to 6%. African exports rebounded notably in the first quarter of 2012, growing at an annual pace of 32%, up from the -11% pace recorded in the last quarter of 2011. Growth has been widespread, with over one-third of SSA countries posting 6% or higher rates with another 40% growing between four to 6%. Among fast-growing economies in 2011 were resource-rich countries such as Ghana, Mozambique, and Nigeria, as well as other economies such as Rwanda and Ethiopia, all posting growth rates of at least 7% in 2011.
Africa is making progress on reducing poverty. The World Bank’s latest global poverty update shows that the region’s $1.25 a day poverty rate has fallen from 58.1% in 1999 to 47.5% in 2008, a 10.6 percentage point decline. The decline in poverty accelerated in 2005–2008, with nine million fewer people living below $1.25 a day — the first such recorded decline in the number of poor.
Despite this success, serious development challenges remain in Africa, where governance and transparency remain weak, and 645 women die during pregnancy and childbirth per 100,000 live births.
Economic and social conditions are improving in Africa. Maternal deaths fell by 26% between 1990 and 2009 and child mortality rates are also falling. HIV infections are stabilizing, primary school completion rates are rising faster than anywhere else in the world, and the number of people living in extreme poverty is falling.
In 2011, foreign direct investment flows jumped 25% to an estimated $35.6 billion, after declining sharply in 2009 and 2010. The business climate is improving and favorable economic prospects are attracting investment flows in the telecommunications, real estate, and retail sectors. Remittances have rebounded as well, posting a high of $23 billion in 2011.
After 10 years of high growth, an increasing number of countries in Africa are moving into ‘middle- income’ status, countries achieving more than $1,000 per capita income. Of Africa’s 48 countries, 22 states with a combined population of 400 million people have officially achieved middle-income status, while 10 countries representing 200 million people would reach middle-income status by 2025 if current growth trends continue or with some modest growth and stabilization. Another seven countries, home to 70 million people, could reach this milestone if they created economic growth of 7% growth over the coming years. For example, Sierra Leone could grow at this rate because of its recent expansion in mining.
Africa’s long-term growth will increasingly reflect interrelated social and demographic changes creating new domestic engines of growth. Key among these will be urbanization, an expanding labor force, and the rise of the African middle-class consumer. In 1980, just 28% of Africans lived in cities. Today, 40% of the continent’s one billion people live in cities. By 2030, this share is projected to rise to 50%, and Africa’s top 18 cities will have a combined annual spending power of $1.3 trillion.
With strong emphasis on increasing regional and national competitiveness, creating more jobs and opportunities for families, while reducing vulnerability and improving resilience, the World Bank Group works to deepen the impact of its development mission in client countries and complement the efforts of other key partners, including African governments and communities, the private sector, civil society, think tanks, and others.
Competitiveness and employment - The plan assists countries to diversify their economies and generate jobs, especially for the 7-10 million young people entering the labor force each year. It will help to close the gap between infrastructure needs and investments - currently at US$48 billion annually -- and support efforts to make it easier for businesses to operate. In addition the plan will focus on building the skills of workers.
Vulnerability and resilience - Africa's poor are directly affected by shocks -- economic, health-related, natural disasters and conflict -- which keep them in poverty. By focusing on better health care, dealing preemptively with the effects of climate change through improved irrigation and water management, and strengthening public agencies to share resources more fairly and build consensus, the plan seeks to reduce the number of shocks and limit the damage from those that do occur.
Governance and public sector capacity - Critical services, in education, health and basic infrastructure, are too often either not delivered or delivered badly because of weak management of public funds. The Bank's program of support aims to give citizens better information on what they should expect from their governments, as well as the capacity to report on instances when services are not delivered properly. The Bank also works directly with governments to help them improve their systems and capacity to deliver basic services and manage accounts.
The region is strengthening partnerships, building knowledge, and leveraging finance. Operational quality and results are improving, along with more work across different strategic sectors, from agriculture to education and health and infrastructure. A recent report on the first 18 months of the strategy's implementation shows continued improvement in each of the three key areas. Through Strategy Pillar One, competitiveness and employment, improvements have been made to the business environment, access to finance, infrastructure, including strategic cross-border services, as well as increased learning for all, increased agricultural productivity and diversification. Strategy Pillar Two, vulnerability and resilience, shows progress in an increase in social safety nets coverage, improved maternal and child health care services and malaria and HIV prevention, improved resilience of economics to climate change risks, increased engagement in fragile states, increased engagement in middle income countries, and improved aid effectiveness, country systems and work in partnerships. Pillar Three, organizational and operational effectiveness, shows an increase in the disbursement ratio for investment lending projects. For more information, please see Strategy for Africa: Eighteen Months Into Implementation Progress Report April 2013.
The World Bank Africa Region is also undertaking several management and organizational changes. Through deepening of decentralization and creation of sub-regional technical and knowledge hubs, the Bank will be closer to the client and respond quickly to diverse clients and changing business needs, improve operational effectiveness, and better coordinate with partners. The World Bank Africa Region will work selectively and focus on results, flexibility, efficient delivery, and innovation while increasing the use of programmatic approaches and maximizing the performance of its portfolio.
Last Updated: Aug 12, 2013
In fiscal year 2012 (FY12), the World Bank Group’s financial commitments to SSA, a major priority for the institution, increased by US$2.8 billion to US$12.2 billion and included:
US$7.4 billion in the International Development Association (IDA) credits, grants, and guarantees, up from US$7 billion from the previous year
US$4 billion from the International Finance Corporation (IFC) for private sector development projects
US$147 million in the International Bank for Reconstruction and Development (IBRD) lending
US$637 million in the Multilateral Investment Guarantee Agency (MIGA) guarantees for projects
US$7.06 billion in development financing to Africa, representing a $400 million increase over the $6.6 billion delivered the previous fiscal year
Agriculture: In response to rising food prices worldwide, the Bank scaled up its development financing for agriculture programs across Africa, providing more than US$1billion in FY 2012. The Bank’s work is closely aligned with the Comprehensive Africa Agriculture Development Program, an Africa-owned and Africa-led initiative for increasing productivity in agriculture.
Education: African countries have significantly increased their primary school enrollments with millions of young students now attending school for the first time. In line with its education strategy, the Bank focus on “Learning for All” by working with African countries, donors, community leaders, employers, and families to focus more on education that prepares young people with the right modern skills to find good-paying jobs in the workforce.
Health: Progress has also been significant on the health front. Ethiopia, Gambia, Malawi, and Rwanda reduced child mortality by at least 25% over the past decade, with the rate in Rwanda falling 47%. Many African countries have reduced maternal mortality by 20% to 50%.
HIV/AIDS and Malaria: Bank financing of more than US$2 billion to date for the fight against HIV/AIDS in Africa has helped to catalyze global funding for HIV/AIDS, which rose from US$1.6 billion in 2001 to more than US$16 billion in 2010. The Bank has also been an active partner in Africa’s efforts to control malaria. The Malaria Booster Program has financed 73.8 million mosquito nets across the Booster portfolio. To date, the Bank has committed US$772.8 million to 22 projects across 20 countries in Sub-Saharan Africa. The Booster program has contributed to significant progress in Benin, the Democratic Republic of Congo, Ethiopia, Nigeria, and Zambia.
Social Protection: Strong examples of social protection are evident in the work performed across the continent. In Ethiopia, for example, the Bank committed additional cash and food transfers for 10 million people during the global economic crisis. Social protection reduces inequality and promotes social stability.
Regional Integration: Regional integration is critical to accelerating progress in Africa. The Bank has doubled its investment in regional integration from US$2.1 billion in 2008 to US$4.2 billion in July 2011, and investment rose to US$5.9 billion in July 2012.
Energy: Energy security is a key priority for the World Bank. The Africa Region’s team is moving ahead to put power infrastructure in place to plug regional communities into cross-border power pools, more irrigated land to grow food and create jobs, galvanize more trade and commerce within the region, and to unlock all the other development potential that electrical power makes possible. The recently approved Lom Pangar Hydropower Project on Cameroon’s Sanaga River will increase electricity generation and improve the reliability of power supply for up to five million people and help lower the costs, which will mean less frequent power cuts especially during the dry season and more productive investments.
The Regional Eastern Africa Power Integration Program will connect Ethiopia’s electrical grid with Kenya, creating power-sharing between the two countries, reducing energy costs and promoting sustainable and renewable power generation. This will be transformational for Kenya, a country with enormous potential to reach middle-income status in the next decade, but where severe power shortages are hampering growth. For both countries, it will also mean more jobs.
Together these projects will bring more power to millions of people, bettering the lives of mothers, school children, teachers, doctors, shopkeepers, and others–people who need electricity to thrive and do more for their families and communities.
Climate Change: Estimates show that the African continent faces an annual loss of 1% to 2% annual gross domestic product (GDP) because of climate variability. The Bank continues to encourage more investment from public and private sector bodies and governments of developing countries to stop deforestation in return for access to carbon credits. Forests are excluded under the Kyoto Protocol, although deforestation, especially in the tropics, contributes about 20% of man-made global carbon emissions.
Last Updated: Apr 08, 2013
The Africa Region has a strategic partnership with key development partners involved in the development of the continent. The World Bank’s strategy for the Africa is being implemented by leveraging partnerships, knowledge and Bank’s Group financing instruments.
The Africa region has strategic bilateral partnerships with African countries. The Bank is working with key regional and sub-regional organizations and financial institutions, including the African Union the African Development Bank, and NEPAD, and has developed strong partnerships with the private sector, think thanks, parliamentarians and African civil society.
The Bank also collaborates with a wider range of partners at the national, regional, and global levels, stepping back where others have comparative advantage and leading where the Bank is well place to do so.
Mobilizing partners to deepen and accelerate support for Africa is a top priority and requires closer partnerships with nonconventional development actors, including Brazil, China and India, as well as global funds, Arab funds, and private foundations.