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Johannesburg
- The African Development Bank (AfDB) is bullish about Africa's growth outlook,
the organisation's chief economist Professor Mthuli Ncube said on Tuesday.
He was
speaking at the launch of the African Economic Outlook 2010 report in
Johannesburg.
The AfDB
expects Africa to grow by 4.5% this year and by 5.2% in 2011. It has increased
loans to African countries most affected by the 2008 recession.
"The
outlook for Africa is generally positive. Africa's showing a V-shaped
recovery," said Ncube. He added that while the AfDB was bullish about
Africa's growth, it was also aware of the risks.
"Commodity-driven growth might bring further specialisation and growth volatility. Exit
strategies might be politically difficult," he said.
Diversification
of products in African countries was identified as crucial. Countries such as
Botswana, which is heavily reliant on diamond exports, were severely affected
during the recession when global demand was at its weakest. Ncube suggested
that Nigeria could teach other African countries a few things about
diversification.
"People
think Nigeria is only reliant on oil. There's been a quiet surge in agriculture
in terms of contribution to gross domestic product in Nigeria. It's a great
diversification," Ncube said.
The report
referred to East Africa as "the real engine of growth on the
continent" and "the fastest growing region in Africa".
"Africa
is on the move. There are so many opportunities," said Standard Bank CEO Jacko Maree, who attended the launch.
Exchange
rates
Ncube also
called on governments to encourage the flexibility of exchange rates.
"Exchange
rate movements in Africa should be flexible. You do need a flexible exchange
rate to respond to economic shocks. Flexibility in the exchange rate is the way
to go," Ncube said.
Asked
whether he thinks there should be a single currency in Africa, Ncube responded:
"One currency for Africa? I don't know when that will happen, but I would
say let's start with currency compatibility first."
- I-Net Bridge