Africa Faces ‘serious’ threat from European Crisis as 2011 growth halves

BY AGENCIES

AFRICA’S economy may face “serious” threats this year because of the crisis in the euro region, after growth almost halved in 2011 amid political uprisings in Tunisia, Egypt and Libya, the Economic Commission for Africa said.

Economic growth slowed to 2.7 percent in 2011 compared with 5 percent a year earlier, the Addis Ababa-based United Nations agency said in a statement distributed to reporters in the Ethiopian capital today. Growth excluding the North African region was 4.5 percent, little changed from 2010, it said.

“Africa’s prospects for 2012 would seem encouraging, but given current global economic uncertainty, I would urge continuous vigilance as the signs are ominous and we may face serious threats,” Abdoulie Janneh, executive secretary of the commission said in the statement.

Europe is Africa’s biggest economic partner and the crisis may crimp trade flows, remittances, investment, tourism and donor funding, the commission said. Efforts to deflect some of the impact of the euro zone crisis by diverting exports to emerging economies are being stymied by slowing growth in economies including Brazil, China, India and Mexico, it said.

“The best possible outcome for all of us would be a speedy resolution of the euro zone crisis and for resumed and sustained growth in the U.S.,” Janneh said.