Expert at the World Bank has predicted an increased Capital flows into Africa saying it will grow significantly in 2012 as investors seeking higher returns out of Europe, look at the continent for better opportunities in infrastructure projects. The Multilateral Development Bank expects economic growth in the continent to be 5.3 per cent this year and 5.6 for 2013, despite increased concerns about the euro zone debt crisis, its main export market.
Marcelo Giugale, Africa’s Poverty Reduction and Economic Management director at the World Bank, said that the appreciation of the region’s currencies against the dollar was an indication of increased foreign direct investment (FDI). “Most currencies in Africa have appreciated this year, which means investors expect some of those countries to do very well,” Giugale told Reuters in an interview.
“There is a boom in urban construction mainly from repatriated money. The amount of offer that Africa is getting to build its infrastructure, which is long haul investments, is clearly increasing.” For instance, the government in Tanzania said it plans to build a $684 million 300 MW gas-fired power plant in the south of the country in the 2011/12 financial year, which runs until June 30, 2012, to plug energy shortages, after securing a loan from China. Tanzania says the project would also involve construction of a 1,100-kilometre power transmission line from Mtwara in southern Tanzania to Singida region in the centre of the country.
In neighbouring Uganda, British oil company Tullow Oil Plc has a $10 billion plan to start pumping oil from huge reserves discovered on the shores of Lake Albert. Early production is scheduled to start in 2013 before ramping up to a major production phase in 2016.
