Posted on April, 3, 2019 at 09:36 am
EAST African economies maintained the pace as fastest growing in Africa with an average growth of 5.7 percent against the continent’s average of 3.5 percent according to African Development Bank’s 2019 report.
Released last week, the African Economic Outlook Report stated that North Africa was second fastest growing region with a rate of 4.9 percent while West Africa came in third at 3.3 percent with Southern Africa trailing at 1.2 percent.
The continent’s growth is projected to accelerate on average by 4.0 percent this year while adding a point to peak 4.1 percent by 2020.
“East Africa, the fastest growing region, is projected to achieve gross domestic product (GDP) growth of 5.9 percent in 2019 and 6.1 percent in 2020,” read part of the report.
It further clarifies that, between 2010 and 2018, sustained growth averaged at almost 6 percent, with Tanzania, Rwanda, Djibouti and Ethiopia recording above-average rates. But in several other countries, notably Burundi and Comoros, growth remained weak due to political uncertainty.
North Africa is expected to account for an increased growth by 1.6 percentage points partly because of erratic and uncertain circumstances in Libya’s economic and social spheres.
Growth in Central Africa is gradually recovering but remains below the average for Africa as a whole thanks to the recovering commodity prices and higher agricultural output.
Growth in Southern Africa is expected to remain moderate in 2019 and 2020 after a modest recovery in 2017 and 2018 due mainly to South Africa’s weak development, which affects neighboring countries.
Investment’s contribution to the growth increased from 14 percent in 2015 to 48 percent in 2018 while net exports, a continent’s economic growth catalyst, have had a positive contribution since 2014.
“Key drivers of Africa’s economic growth have been gradually rebalancing in recent years. Consumption’s contribution to real GDP growth for example declined from 55 percent in 2015 to 48 per-cent in 2018; but despite the rebalancing trend, most of the top-growing countries still rely primarily on consumption as an engine of growth,” the AfDB report read.
Inflationary pressures have eased with the continent’s average inflation falling from 12.6 percent in 2017 to 10.9 percent in 2018 and is projected to further decline to 8.1 percent in 2020. Double-digit inflation occurs mostly in conflict-affected countries and countries that are not members of a currency union which politically unstable South Sudan having a rate of 188 percent.
Inflation is lowest, at 2 percent or less, in members of the Central African Economic and Monetary Community and the West African Economic and Monetary Union and particularly in members of the CFA Zone because of its link to the euro.
Source: IPP Media