• September 26th, 2018
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Africa's economic outlook promising

Features, Business & Finance, Africa
Features, Business & Finance, Africa

…but political unrest remains a concern MIDRAND, South Africa - Despite a positive economic outlook for the African continent in 2015, the African Union has warned that political unrest, labour disputes, high and volatile food and fuel prices as well as adverse weather conditions are threatening to undermine growth on the continent. "Continuing trends in the global economy could pose some risks to our growth if not carefully managed. These include weaker growth in China and ongoing fiscal tightening in the Euro Area and the United States," said Erastus Mwencha, Deputy Chairperson of the African Union Commission yesterday when presenting the draft budget of the African Union for 2015 to the Pan-African Parliament. Mwencha indicated that economic growth in Africa is expected to accelerate to an average 4.7 percent and five percent in 2015. "Economists project that the continent will have seven of the ten fastest growing economies over the period to 2015, outpacing the Asian region," he said. Inflation is expected to decelerate from an average seven percent in 2013 to 6.3 percent in 2015. The continent would continue to experience unprecedented growth. "The African Union will increasingly be expected to play a greater role in the continental transformation process," he said. The AU has 11 organs and agencies in total. Growth on the continent can only be sustained if poverty and inequality are reduced and its economy steps up, he said. The African Union’s proposed budget for 2015 is slightly over US$499 million (about N$5.5 billion). The African Union Commission will receive the biggest chunk of the budget with an amount of US$409 million (about N$4.45 billion) compared to funding to the New Partnership for Africa's Development and Pan-African Parliament. Mwencha said 31 percent of the budget will be financed by member states while the remaining 69 percent will come from partners. The proposed assessed contribution of member states towards the 2015 budget is US$156.9 million (slightly over N$1.7 billion). AU funding towards the annual budget has been constrained for the past three years, with a near zero growth in the operational budget and a five percent cap in the overall budget. "This state of affairs is compounded by the fact that continental integration does not appear among the key priorities of member states," said Mwencha. Demands for the AU’s services are growing at a rate beyond what can realistically be funded through the regular budget, he said, adding that it is the reason why the AU is increasingly dependent on funding "from development partners that are unpredictable, often tied to development conditions, require special management and, thus involve some risk for some of the key programmes.” Mwencha warned that overdependence on external funds for AU programmes undermines programme ownership. "The AU needs an adequate, predictable base of regular resources in order to fulfil its mandate and preserve African character in supporting member states to fulfil their developmental goals," he said.
2014-03-14 09:56:49 4 years ago
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