SADC citizens must brace for slow economic growth

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Windhoek - Southern African Development Community (SADC) citizens have to brace themselves for tougher economic conditions as various SADC countries’ economies are only projected to grow minimally for the next two years.

Since 2016/2017, several SADC countries have seen their economies struggle for growth, with the region’s economic growth averaging at a mere 1.9% and several countries suffering in setback in real per capita growth.

The trend continued last year, as the region’s economic growth remained subdued affecting the livelihoods of the citizens in the process.

Despite expected economic growth in 2019 for some SADC countries, there is not much to celebrate, as it is minimal growth, which is not expected to return the region to its former economic growth exploits.

Growth for SADC’s largest economy, South Africa, could only improve to 1.5% in 2019 and 2.1% by 2021. South Africa’s economy grew by only 0.8% in 2018 follow, as its momentum slowed during the last three months of the year.

The South African economy has been experiencing persistence lethargic growth with the economy failing to grow by more than 2% since 2013. In 2017, the country was in a brief recession.

Despite the projected growth for 2019, the International Monetary Fund (IMF) has lowered South Africa’s projected Gross Domestic Product (GDP) growth rate for 2019 from 1.4% to 1.2%, putting the country among the worst performers in sub-Saharan Africa.

According to IMF, the projected recovery reflects modestly reduced but continued policy uncertainty in the South African economy after the May 2019 elections.

Its neighbour, Namibia, whose economy has also been struggling since 2016 is only expected to reach a growth rate of up to only 1.0%, from a contraction of between 0.2% and 0.5% in 2018, according to the ministry of finance.

Bank of Namibia, however, cautioned that Namibia’s GDP is projected to recover slightly only up to 0.3% in 2019, before improving to 1.9% in 2020.

The slight increase is expected to be driven by growth in the manufacturing sector (1.6% in 2019 and 2% in 2020). Predicted improvements in the construction sector, hotels and restaurants sectors are also expected to contribute to the growth.

Depending on the timely implementation of supportive policy measures, domestic economy is projected to emerge from recession this year.

For Angola, the growth rate is estimated at 2.4% for 2019, strengthening to 3.2% next year as the pass-through effects of oil prices take hold.

Namibia’s finance minister, Calle Schlettwein, said the outlook for main neighbouring trading partners is generally weak.

“The current climatic catastrophes, the most severe flooding in recent times in one part of southern Africa and the most severe drought in other parts of southern Africa present a significant emerging risk to the economy,” he said.

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