Bleak year predicted for Africa

Press, 8 April 1987, Page 10

Bleak year predicted for Africa

NZPA-Reuter Addis Ababa Africa’s economic performance in I*BB was disappointing and prospects for I*B7 are bleak, according to a United Nations report made public yesterday. The report, prepared by the U.N. Economic Commission for Africa and the African Development Bank, said: “Despite the determination by African countries

to undertake policy and institutional reforms, the economic growth for the region was disappointing in I*Bo.

“The combined gross domestic product in real terms increased by only 1.2 per cent.”

Performances varied considerably, with oil exporting countries experiencing a decline of U per cent in their G.D.P. and non-oil exporters recording 4 per cent

growth. The continent’s inflation rate rose to 9.8 per cent last year from 8.9 per cent in 1985, the report said. Agricultural output increased 3 per cent because of good weather and improved incentive schemes, and manufacturing improved by 4 per cent The decline in oil prices and falling world demand for minerals last year led to an estimated 28 per cent fall in export earnings, turning a $19.32 binion surplus in 1985 into a $12.4 billion deficit in 1988. The report said prospects for 1987 were bleak, with depressed markets for Africa’s

primary commodities. “Trade and current account deficits are likely to remain large, though below 1988 levels. - The volume of net resources and inflows Is expected to stagnate at 1988 level,” it said. Agricultural output would jgrow again this year and the manufacturing sector would be hampered by shortages of imported raw materials, the report forecast It advised African governments to curb increases in public spending and subsidies to public enterprises, noting that rapid growth in subsidies and public spending had not brought in enough cash and often led to deficits.