If you want to hear some sunny economic forecasts for 2012, it’s best not to go looking in the United States – where GDP will grow by a lackluster 2 percent – or the eurozone, where the economy will actually get smaller this year.
No, if you’re looking for good news you’d be better off turning to the world’s poorest region, sub-Saharan Africa, where the economy is set to grow by nearly 6 percent in 2012.
And that growth won’t be limited to regional powerhouses like Nigeria and South Africa: One third of sub-Saharan Africa’s poorest countries, which have weathered the global economic downturn relatively unscathed, are expected to beat the region’s average growth rate.
Leading the pack is Sierra Leone, a South Carolina-sized West African nation with a population of 6 million. The country’s GDP is set to swell by a mammoth 51.4 percent in 2012, according to the IMF. That’s largely thanks to a single company: the junior mining firm African Minerals, which is mining iron ore in the middle of the country.
African Minerals has already raised $1.4 billion for its Tonkolili iron ore project, which includes a refurbished deep-water port and a 120-mile railway line. That’s very big money in Sierra Leone, where the value of the entire economy was just $1.9 billion in 2010.
Mining investment is also bringing big gains to Niger, a poor West African nation that ranked second from the bottom on the most recent UN Human Development Index. With new uranium mines coming online, Niger is set to become the world’s second-biggest uranium producer by 2014. Thanks to those projects as well as a new oil rig, Niger’s economy will grow by more than 12 percent this year, the IMF predicts.
The other big performers this year will be sub-Saharan Africa’s oil producers, whose export earnings will be buoyed by high global fuel prices. Angola, the region’s second-biggest oil producer after Nigeria, will be among the handful of countries in the region to register double-digit growth in 2012, the IMF predicts, with a forecasted GDP increase of 10.8 percent.
But whether the economic growth in these booming economies will make life any easier for the masses is still an open question.
Of course poverty is still deeply engrained in sub-Saharan Africa, despite the recent growth. In places, that poverty has been exacerbated by jumps in the prices of food, fuel, and other consumer goods. In Ghana, sub-Saharan Africa’s top performer in 2011, the average household still spends more than half of its income on food – a sure sign that money is still tight for many.
But economic growth across the region has made life easier for many. Sub-Saharan Africa’s middle class has been growing steadily since the 1980s, and it totaled more than 350 million in 2010 – that’s more people than live in the entire United States.
Boosting trade within the region is key to making the most of that growing consumer wealth, experts say, and officials are expected to make some headway on economic integration this year.
Negotiations toward a “Grand Free Trade Area of Africa” began in June and will pick back up at the African Union summit in Addis Ababa later this month. Officials say they aim to create a mega free trade zone that would stretch from Egypt to South Africa, covering some two dozen countries and more than half a billion people.