Sunday, April 18, 2021

Botswana to lead Sub- Saharan Africa economic growth in 2011

The International Monetary Fund said Sub Sahara Africa is on good path to achieve its 2011 economic growth forecast unless something drastic happens that could sway the numbers.

Alfredo Cuevas, IMF senior resident representative based in South Africa, said the region has different groups of countries, but said the average growth of 5.5 percent was feasible.

“I do not think the forecast will change much as there is nothing happening,” he said ahead of economic outlook review in April.

IMF will be reviewing its Regional Economic Outlook in the next 4 weeks with exporting countries like Botswana likely to surpass that figure as recovery in exports has been sustained since the end of last year.

During his budget speech Kenneth Matambo, Botswana’s Finance Minister, suggested n real terms the country’s economy will grow by 6.8 percent in 2011 and 7.1 percent in 2012 provided the mining sector sustains the growth.

South Africa, which is Botswana’s largest trading partner, is seen growing at a slower pace of about 3.4 percent.

However, growth in Sub Sahara could be affected by the Middle East and Libya political instabilities that have been pushing fuel and food prices high.

The IMF said ‘increases in prices of oil carry risks’ that could affect public finances as governments could takes steps to subsidise consumers.

“Oil imports will see an increase in a very important input putting pressure on governments and creating threat to public finances,” added the Mexican.

The positive economic forecast, which is from the lower base, also comes at a time when China is having a great interest in the region and investing billions of US Dollars in infrastructure.
In Botswana alone, Chinese companies are involved in the construction of public works that include dams, airports, schools and hospitals bringing their combined income to P20 billion.

Cuevas said IMF is interested in the presence of China in Sub Sahara adding that they have had a dialogue with a number of Chinese companies.

“We are (however) not singling them out,” he clarified. “They are helping in the provision of infrastructure. We want to understand the implication of their presence here”.
China is cash rich and it is literally buying anything in the sub continent through its array of cash instruments including its Sovereign Wealth Funds.

This week the Chinese Prime minister Wang Qishan was in Zimbabwe and his country pledged of $700 million to that country.

Data has shown that volume between Africa (including Sub Sahara) and China was targeted to reach over US$ 100 billion in the course of 2010 through greater co-operation between the two regions.

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