Ebola to slow growth in Africa, says report
Friday October 10 2014
A Kenya Airways plane at Jomo Kenyatta International Airport in Nairobi. The aviation sector is among those most affected by the Ebola outbreak. FILE PHOTO | NATION MEDIA GROUP
African economies are expected to continue expanding at a moderate pace though terrorism and Ebola could significantly hamper growth, a new report said.
Released Thursday, it said regional growth was projected to rise to 5.2 per cent next year compared to this year’s projected 4.6 per cent.
Development will be driven by increased investment in infrastructure and strong sectoral growth in agriculture, retail, telecommunications and financial services, the World Bank Africa Pulse report said.
“Overall, Africa is forecast to remain one of the world’s three fastest-growing regions and to maintain its impressive 20 years of continuous expansion,” Mr Francisco Ferreira World Bank chief economist for Africa said.
“Downside risks that require enhanced preparedness include rising fiscal deficits in a number of countries, economic fallouts from the activities of terrorist groups such as Boko Haram and Al Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa.”
Terrorism has affected performance of key sectors such as tourism dampening prospects.
Ebola in West Africa has also impacted negatively on the region’s economy forcing a redirection of resources that would have been used for development into the crisis.
The outbreak forced airlines, including Kenya Airways, to suspend flights to affected countries in a move that could have a significant effect on their revenues.
A World Bank study of the likely economic impact of Ebola released last month, said if the virus continues to spread in the three worst-affected countries, its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states of Guinea, Liberia and Sierra Leone.
According to the report, a twice-yearly analysis of the issues shaping Africa’s economic prospects, growth slowed notably in South Africa - the region’s second largest economy - due to structural issues and low investor confidence. The country registered a one per cent year-on-year growth in the second quarter of 2014, the lowest in five years.