Text II. Africa's Strong Growth

The US economy may be set to slow in 2008, but Africa’s protracted economic boom is poised to accelerate from 6.1% in 2007 to 6.8% in 2008—the region's best performance since the early 1970s. That, at least, is the forecast contained in the IMF's October 2007 World Economic Outlook. “Sub-Saharan Africa is clearly enjoying its best period of sustained growth since independence” it says, adding that while oil exporters are growing the fastest “most others" are also growing strongly and outperforming historic trends.

In the decade to 1996 the African economy grew by 2.2% a year; in the ten years to 2006 annual growth averaged more than 5%, meaning that after two decades of decline real incomes per head are now rising at over 2% annually. And while the average gap with the rest of the developing world remains very wide, African policymakers are increasingly confident that they are creating a platform for sustained growth over the next decade, during which time income gaps will start to narrow.

The IMF is at pains to stress that there is more to the African boom than the upsurge in commodity prices. While regional growth did take off in the wake of the commodity price boom, non-commodity exporters are also growing faster than before partly because they have managed to expand non-traditional manufacturing exports and diversify export market destinations, especially in Asia, where the demand for resource-based products is strong. That said, the IMF acknowledges that the growth acceleration since 2002 reflects “largely the coming on stream of new production facilities in the region's oil exporting countries such as Angola and Nigeria”. In 2008, non-fuel commodity prices are forecast to weaken while oil prices are set to show further handsome gains. As a result the region's terms of trade will improve again, providing strong base for continued above-average GDP growth in 2008.

Most African countries are forecast to maintain “relatively high” rates of growth while inflation will “generally moderate,” excluding Zimbabwe where it forecasts average inflation accelerating from 1,017% in 2006 to 16,170% this year. (There is no forecast for average inflation for the country in 2008 but the year end figure is projected--with pin point accuracy--at 137, 873.1%.) The most rapid rates of growth are forecast to occur in oil exporters, and in countries undertaking economic reform. Expansion in the continent's largest economy, South Africa, will continue to be boosted by the ongoing investment and construction boom as preparations for the 2010 football World Cup gather momentum. The region's second largest economy, Nigeria, will benefit from higher oil prices—the IMF is forecasting an oil price increase of 9.6% - and production.

VI. Answer the following questions:

1. Is Africa’s protracted economic boom poised to accelerate from 6.1% in 2007 to 6.8% in 2008?

2. What does African economy growth by 2.2% a year in ten years mean?

3. Is the IMF at pains to stress that there is more to the African boom than the upsurge in commodity prices? Why?

4. Are non-fuel commodity prices forecast to weaken while oil prices are set to show further handsome gains in 2008?

5. Where are the most rapid rates of growth forecast to occur?

6. Will Nigeria benefit from higher oil prices?

VII. Match the words from the text with their definitions.

1) poise	a) the rate of increase of speed or the rate of change of velocity
2) sustain	b) to surge up, a rapid rise or swell
3) upsurge	c) the typical or normal amount, quality, degree, etc
4) diversify	d) to require or need as just, urgent, etc
5) destination	e) advantage or sake
6) acceleration	f) the state of being balanced or stable; equilibrium; stability
7) demand	g) the ultimate end or purpose for which something is created or a person is destined
8) benefit	h) to maintain or prolong
9) average	i) to create different forms of; variegate; vary

VIII. Fill in the gaps with words or word-combinations from the list.

a) challenges of d) windfall gains g) resource rich b) capital inflows e) current- account deficits h) supply-side response c) business environment f) benign i) direct investment

The combination of more open economies in a 1_____ external environment, together with improved and more consistent policy reforms to strengthen the 2________ and official actions to reduce debt burdens has allowed African countries to attract rising private 3________ as well as benefit from “some step-up” in aid inflows and remittances. Foreign 4_______ has been particularly strong in 5________ countries. A smaller number of countries have begun to attract interest from private 6________ - the bulk of which go to South Africa though other such as Ghana and Uganda are also enjoying rising capital inflows.

Most African countries continue to run “significant” 7_________ and, oil exporters excluded, foreign reserves remain “quite low”. As a result currency appreciation has been limited, though the 8________ managing currency inflows are “most pressing” for oil exporters.

The Fund urges African oil producers to spend oil 9__________ “in a prudent manner” ensuring that increase public spending is accompanied by measures to improve the supply-side response in the non-oil economy.

Listening

I. Listen to the recording and fill in the data on the economy of Aland and Beland.

	Aland (in $ m)	Beland (in $ m)
visible exports
visible imports
balance of trade
invisible exports
invisible imports
balance of payments
gdp
gnp

II. Listen to the recording one more time and answer the following questions.

1. How much money is Pastore asking 800 creditor banks to lend?

2. How much was held up after Brazil hadn’t met the IMF's terms?

3. In the new IMF agreement, Brazil promises to slash inflation, cut public spending, increase exports and curb imports. Which of these words means (a) to make more and (b) to make less?

4. For how long does Brazil want to borrow money? What has been the usual lending period?

5. Brazil is asking for a period when it does not have to make repayments. How long is it asking for? What is the usual "grace period"?

6. What other two payments is Brazil asking banks to cut?

7. Is Brazil paying interest on its loans at the moment?

8. Are banks losing money in Brazil?

9. How less in fees does Brazil want its creditor banks to charge next year?

10. By how much will Brazil be in arrears in November?

11. What are the two opposite opinions banks have about the proposals?

12. By how much is Brazil asking its creditor banks to increase their lending?

13. How much will Brazil's total debt be this year? And next year?

14. Is Brazil's economy improving or declining?

15. What are the banks waiting for before they lend any money?

16. What is the law that Brazilian Congress does not want to pass?

17. Why does the Brazilian government say inflation is rising?

18. What is current inflation rate in Brazil?

19. Why do other people think inflation is rising?

20. What assurance do the banks want before they lend money?

Speaking

Make a report (not less than 7¾10 minutes) about the present economic situation in any country.

Writing

I. Using information of International Financial Programme, summarise the situation in Brazil.

II. Translate the following article into English: