The International Monetary Fund estimated that economic growth in the region would reach 4.7 percent this year and 5.9 percent in forecasts from its latest World Economic Outlook.
That would mark a sharp rebound from the 2.1-percent growth the region achieved in 2009 when impoverished sub-Saharan African countries escaped the dire recession that ravaged rich-world economies.
"The region’s quick recovery reflects the relatively limited integration of most low-income economies into the global economy," the IMF said. Sub-Saharan economies were also benefiting from rebounding trade, higher commodity prices and government spending to smooth out the impact of the financial and economic crisis, it added.
While commodity dependent and wealthier international trade-based economies in Africa suffered the most during crisis, economic activity in the region’s poorest countries held up much better thanks to their isolation from the rest the world. "Growth in a number of the more fragile economies even accelerated last year, reflecting mainly stronger policies and reconstruction assistance following periods of civil conflict, economic instability, and previous external shock," the IMF said.
It projected that Africa’s low-income economies as a group would see growth speed up from 4.3 percent in 2009 to 4.7 percent this year and 6.7 percent next year. In sharp contrast past downturns, government spending to offset the impact of weaker economic activity was a positive development during the recent crisis.
"In most cases, the sustainability of public debt trajectories has not been adversely affected, a testament to improved fiscal positions in a number of sub-Saharan African economies in the run-up to the downturn," the IMF said. "As growth becomes stronger, governments should turn their attention from trying to stabilize their economies to focusing "increasing spending on growth enhancing priorities, including infrastructure, health, and education," the IMF said. Such countries also needed return their attention to longer term reforms to encourage investment such as encouraging domestic savings, improving governance and strengthening institutions in order to attract private capital.
However, Africa’s more advanced economies needed to be wary of resurgent inflows of foreign capital "to avoid overheating, unwarranted appreciation, and asset price booms," the IMF said.
Source: World Economic Outlook