Commodity prices will keep up African growth - Manuel
May 14, 2008
By Nasreen Seria
Maputo- Prices of commodities such as gold and platinum would probably continue to trade near record levels, benefiting economic growth in Africa, minister of finance Trevor Manuel said yesterday.
"There's nothing to suggest that they will come off in the short to medium term," he said in an interview in Maputo, where he is attending the annual meeting of the African Development Bank.
"The demand for metals and mineral commodities will remain strong."
Investment into countries such as South Africa, the world's biggest gold and platinum producer, and Zambia, Africa's largest copper producer, has gained as metal prices climbed to records, fuelled by demand from China and India. That is helping to sustain economic growth in the continent, which the African Development Bank expects to reach 5.9 percent this year, exceeding 5 percent for a fifth consecutive year.
"Purely arising from the change in commodity prices and improved terms of trade, you are looking at a sustainable picture," Manuel said.
The price of gold has climbed 9.5 percent in the past six months, reaching a record $1 032.70 (R7 683 at current rates) an ounce on March 17. Platinum has surged 47 percent in the same period, while oil has gained 36 percent.
Record prices for rice, maize and wheat have also benefited food exporting countries in Africa, helping to offset the effect of rising oil prices. Still, soaring food prices were cited by the African Development Bank as a "serious threat" to economic growth on the continent, as resources are diverted to pay for higher import costs and food shortages increase.
The food crisis has led to protests in African countries, including Burkina Faso, Senegal and Egypt.
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