By Nick Mann | 27 May 2013

Africa’s agricultural, mining and energy resources will continue to strengthen its economic growth over the next couple of years, the Organisation for Economic Co-operation and Development said today.

In its latest annual outlook for the continent, the OECD forecast 4.8% growth in gross domestic product this year and 5.3% in 2014.

Africa’s economy grew by 6.6% last year, but over a third of this was attributable to Libya’s recovery. The North African nation’s economy grew by 96% in 2012 after contracting by over 60% the previous year. Without the Libyan contribution, Africa's economy grew by 4.2%, still an improvement on the 3.5% recorded in 2011.

‘The medium-term economic outlook for Africa remains favourable despite some country specific challenges and headwinds from the global economy, in particular Europe’s debt crisis and fiscal uncertainty in the United States,’ the OECD said. It noted that its projections were based on a gradual improvement in the world economy, domestic economic stability and peace in countries affected by political instability.

It added: ‘The main engines of growth are expected to be expansion in agricultural production, robust growth in services and a rise in oil production and increased mining activity, mainly in resource-rich countries. This relatively broad-based pattern of economic growth will be underpinned by resurgence in supply and domestic demand conditions, the latter driven by an increase in consumption and investment.’

West Africa is expected to spearhead the accelerated growth, with ‘robust’ growth also expected in central and east Africa. However, the economic performance of the south of the continent will continue to be ‘blighted’ by the slow recovery of its largest economy, South Africa, while North Africa will be hampered by the slow transition to democracy.

The OECD warned that growth had been accompanied by insufficient poverty reduction, persistent unemployment, increasing income inequalities and, in some countries, deteriorating levels of health and education.

It urged countries to diversify their economies to make the continent’s economy more competitive and to create better quality jobs.

Mario Pezzini, director of the OECD Development Centre, said: ‘Growth is not enough. African countries must provide the right conditions for turning natural resources into jobs, optimise their resource revenues through smart taxation and help investors and locals to make the most of linkages.’

In particular, it called for efforts to focus on increasing productivity in agriculture. Africa accounts for 24% of the world’s agricultural land, but only 9% of its production.

Governments and investors should also ensure a fair share of the proceeds from natural resources and extractive industries are allocated to wider society, such as by making it easier for people to get jobs in ‘promising’ economic sectors, the report added.