Thursday, June 14, 2007

African economy 'to expand 6.2%

Africa's continent-wide economy will grow faster this year, but structural changes are still needed if it is to catch up with the rest of the world.

The continent is expected to achieve economic growth of 6.2% in 2007, an expansion on last year's 5.5%, said a report from the World Economic Forum.

Despite this growth, the study said Africa was still being held back by factors such as poor infrastructure.

It added that corruption and poor access to finance were other concerns.

The Africa Competitiveness Report further said that much of the continent's current growth was being fuelled by external factors such as high commodity prices, debt relief and a upbeat international economic environment.

"Truly sustainable growth, however, must be based on solid domestic foundations rather than a cyclical or exogenous circumstances," said the study.

'Moving faster'

The report, which was compiled in association with the World Bank and African Development Bank, was published at the start of this year's World Economic Forum (WEF) for Africa conference in Cape Town.

"The African macro-economic environment is looking better and better," said WEF senior economist Jennifer Blanke.

"While there have been improvements, the problem is that the rest of the world is moving faster."

The United Nations estimates that Africa's economy needs to growth 7% per year in order to halve poverty rates by 2015, one of the key millenium development goals.

BBC NEWS | Business | African economy 'to expand 6.2%