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Africa's GDP drops to 4.1%

28 March 2014, 07:02

Abuja - Africa's Gross Domestic Product (GDP) slipped from 5.4 percent in 2012 to 4.1 percent in 2013.

Abdalla Hamdok, the Deputy Executive Secretary, Economic Commission for Africa (ECA) made the disclosure at the opening of the 7th African Union-ECA Joint Annual Meeting in Abuja.

He said the drop was occasioned by weakened global demand for goods and services arising from financial and debt crisis in Europe, as well as stunted growth in some emerging economies.

Other factors which accounted for the GDP decrease, he added, include political instability and civil unrest in many major commodity-producing countries.

The ECA boss pointed out that African growth had continued to depend on high commodity demand and prices in the international market, as well as domestic demand as a result of rising income.

He, however, noted that the continent's growth potential remained largely untapped, saying it could be fostered by policies that stimulate aggregate demand and trade among the nations.

He emphasised that “political instability and disruptions in oil production adversely affected growth in Africa's major oil-producing economies.

“Nevertheless, oil-exporting countries remained among the leading drivers of Africa's growth in 2013, with oil alone contributing about 24 per cent of the continent's growth.

Hamdok stressed the need for Africa to design and implement strategies aimed at reducing its dependency on primary commodities and redistribute its resources toward employment-generating activities.

He said Africa's path to development should focus on commodity-based industrialisation, especially in developing a manufacturing sector that was interlinked with other sectors of the economy to enhance competitiveness of African economies in global market.

He added that growth on the continent in 2013 was also buttressed by increased agricultural output “on the back of favourable weather conditions in most areas.''

Agricultural productivity on the continent could be leveraged by industrial policy as an additional essential component of structural transformation, he noted.

He disclosed that one of the reasons behind the reluctance of African countries to sign and ratify international conventions and agreements on trade facilitation was the lack of conviction.

According to him, ECA has been working in close collaboration with the AU Commission to study the impact of introducing trade facilitation measures on the continent.

He said that the measures were aimed at simplifying customs procedures and reducing clearance time for intra-African trade in the context of continental Free Trade Area.

-          NAN

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