Growth in the Africa region was sustained at 4.5% in 2012, reflecting the recovery in North African economies and continued improvement in other regions. Output in sub-Saharan Africa remained robust at 5%, supported by resilient domestic demand, relatively strong export expansion, record net private capital inflows, solid remittance flows and tourism revenues. Inflation leveled off to 9.1%, as commodity prices declined from their earlier peak, due to weaker global demand and increased supply.
Africa’s steady economic growth rates have allowed for important improvements in social indicators, including primary school enrollment and HIV/AIDS prevalence. However, with 386 million people on the continent living in extreme poverty – i.e. on less than $1.25 a day – 239 million hungry, 590 million people lacking access to electricity, and “vulnerable employment” accounting for 70% of job growth, much remains to be done for Africa to achieve the poverty reduction and related MDGs by 2015.
OFID partners with 49 countries in Africa. Collectively, these have received the majority of the institution’s cumulative assistance. In 2012 alone, OFID approved US$558 million to the region in support of new projects benefitting 28 countries.
Since OFID prioritizes the needs and concerns of world’s poorest countries and their populations, African LDCs continued to receive the bulk of the institution’s assistance in 2012, with food and energy security attracting the majority of approvals. Almost 59% (or US$225m) of OFID’s total assistance to the energy sector in 2012 went to Africa under the institution’s Energy for the Poor Initiative. In response to the global rise in food prices, OFID also scaled up targeted lending for food security programs across the continent, with total commitments for agriculture initiatives amounting to US$90m, or close to 89% of OFID’s total assistance to the sector during the year.
As for the type of financing, the largest share (US$347.9m) went in concessional public sector lending, primarily for energy, agriculture and transportation projects. A further US$121.6m was approved in trade financing and included substantial support to the trade activities of SMEs as well as a US$50m line of credit to the PTA Bank to help it maintain its trade exposure strategy among COMESA countries. Some US$85m was channeled directly to private sector projects, the bulk of it for energy initiatives, specifically power plant expansion in Côte d’Ivoire and Ghana and the construction of a wind park in Egypt. In terms of grant financing, around $3.5m was committed to build capacity, and to provide energy, water, sanitation and health services to the region, as well as emergency aid.