Strong growth prospects and double-digit
returns for investors would help shield Africa from the debt crisis
enveloping the western world, the chief economist of the African
Development Bank said in Paris yesterday.
But if the turmoil in Greece tipped developed
countries into another full-blown recession, Mthuli Ncube said Africa
would be hit via a downturn in global trade, falls in commodity prices
and a drying up of credit and foreign aid.
“There are downside risks: a slowdown in the
global economy and a slowdown in China which is driving the sentiment on
commodity prices on which some of the African countries depend,” he
said.
The International Monetary Fund on Tuesday cut
its growth forecast for this year for sub-Saharan Africa to 5.2 percent
from 5.5 percent, warning that a faltering European and US recovery
could undermine prospects for exports, aid and foreign capital.
However, Ncube said that if the debt crises in
developed countries remained contained, he expected recoveries in
conflict-hit Egypt, Tunisia, Ivory Coast and even Libya to push average
growth in Africa to 6 percent next year.
He said: “I think that because of that Africa
is attractive (for investors) and therefore there’s enough cushion to do
well even under the current circumstances.”
With global leaders battling to save Greece
from defaulting on its debt, advanced economies are under heavy pressure
to cut their ballooning debt levels, leading to market turmoil and
stringent budget cuts that are crimping economic activity.
He said many African countries had improved economic management and diversified their economies. – Reuters
