2010.06.10Tunisia: The auto components and textiles affected by lower demand for two more years!

A panel discussion on prospects for growth in Africa and Tunisia was held Tuesday, June 8, 2010, at the head of Amen Bank, in light of the 2010 edition of the "African Economic Outlook", a joint report the African Development Bank, OECD and the United Nations Economic Commission for Africa, published May 24 last, at the annual meetings of the ADB.

Several eminent personalities attended the event including Chief Economist of ADB, Mthuli Ncube, vice president of operations country, Aloysius Ordu, the first secretary of the European Commission delegation in Tunisia, Massimo Mina, Director analysis to the Department of Development and International Cooperation, Alaya Becheikh and the Director of Research of the ADB, Leonce Ndikumana, and the Director of Tunisia, Jacob Kolster.

Focusing on the theme: "The mobilization of public resources", the report stresses that the global economic crisis has stopped the period of strong economic growth in Africa by reducing the continent's GDP growth averaging around 6% in 2006 -2008 to 2.5% in 2009 with a GDP per capita at a virtual standstill. African economies should recover gradually, reaching an average growth rate of 4.5% in 2010 and 5.2% in 2011 although the recession left its mark.
"It is important to solve structural problems even before the global crisis, which reduced the potential for growth and caused high levels of poverty," said Leonce Ndikumana, Director of Research at the ADB.

Indeed, the continent has shown resilience to the crisis. Despite the revival of the expected growth, the slowdown could make it more difficult for some African countries achieving the Millennium Development Goals (MDGs) to halve the number of people living in poverty by 2015.

The report highlights the inequality of the recovery across the continent, Southern Africa, which has been hardest hit in 2009 are expected to rise more slowly than other regions, with growth averaging nearly 4% 2010-2011.

The East African, who has resisted the global crisis, should again reach the highest growth, with more than 6% on average in 2010-2011, while North Africa and Africa West should both grow about 5% and 4% in Central Africa during the same period. A similar pattern prevails in all sectors.
The report notes that Africa has proved more resilient to the global crisis thanks to sound macroeconomic policies in place before the recession, which resulted in improved economic fundamentals in many African countries.

Combined with sustained aid flows, reduction of previous debt and loans the IMF, World Bank and African Development Bank, this has enabled it to adopt policies against-cyclical in turn, have mitigated the impact of the crisis. However, challenges to policy remain.

With regard to Tunisia, the report shows that the country has managed the consequences of the global economic crisis with a positive growth rate of 3.1% in 2009 and 4% in 2010.

Tunisia has also managed to withstand the shocks of rising global fuel prices and grain products. Indeed, the rate of inflation was only 3.5% in 2009 (against 5.1% in 2008), with the compensation policy of commodity prices, declining world prices of those products and the pursuit of prudent monetary policy.

In terms of mobilizing public resources, the report notes that the tax reforms and rationalization of public expenditure have led to improved indicators of public finances and fight against tax evasion.

However, although the country has been relatively unscathed by the global crisis on the financial front, it will continue to face in the next two years in the real effects of declining European demand. This decline is likely to affect more production and exports of automotive components and clothing items. Nevertheless, the crisis could offer opportunities for foreign investment: seeking to cut costs, companies in industrialized countries will be forced to outsource more, which should go in part to Tunisia.

To meet these challenges, Tunisia must transform its existing production structure, dominated by sectors with low ratios and labor-intensive unskilled sectors in favor of new structurally intensive skilled labor and especially high value, capable of hoisting the national growth rate to a higher level.

Through this report, we can see that the future of Africa's progress will depend on good governance and economic policy, improvement of infrastructure, intra-regional trade, reducing inequality and poverty, and improving the mobilization of public resources.

Source: africanmanager.com

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