Southern Africa’s economic growth stutters


Mpho Tebele

Gaborone - Southern Africa looks increasingly likely to miss its projections for economic growth as its momentum slowed in 2018.

According to the African Development Bank African (AfDB) Economic Outlook 2020 report, Southern Africa’s growth slowed from 1.2 percent in 2018 to 0.7 percent in 2019. The report states that the economy was dragged down by cyclones Idai and Kenneth and the devastation of infrastructure and agriculture in Malawi, Mozambique and Zambia, combined with the weak growth in Zimbabwe, South Africa, Angola, and Namibia.

“Zimbabwe slipped from growth of 3.4 percent in 2018 to a contraction of 12.8 percent in 2019, due mainly to monetary issues related to currency convertibility that have distorted the efficient functioning of goods and factor markets,” AfDB noted.

It says growth in South Africa remains lackluster, slowing to 0.7 percent in 2019, dragged down by the slow recovery in commodity prices and the fiscal risks associated with unbudgeted bailouts for ailing parastatal utilities.

“Oil exporters still lag behind net oil importers, though the gap has started to narrow. In 2016, the gap was 1.5 percentage points, but by 2019 it was 0.3 percentage point — suggesting that oil exporters are gradually improving their macroeconomic and structural environment and mitigating the resource curse,” the report says.


Africa’s estimated 3.4 percent growth masks significant cross-regional and cross-country variation.

The report shows that East Africa maintained its lead as the continent’s fastest-growing region with estimated growth of 5.0 percent in 2019, with Rwanda, Ethiopia, and Tanzania leading. South Sudan’s growth accelerated from 0.5 percent in 2018 to 5.8 percent in 2019, mainly as a result of increased oil production following the peace agreement in September 2018.

But growth, the report observes, slowed in Kenya from 6.5 percent to 5.9 percent, with the winding down of the fiscal stimulus from previous years.

North Africa is the second-fastest-growing region, with average growth estimated at 4.1 percent for 2019. Its performance is explained by the growth momentum in Egypt (from 5.3 percent in 2018 and 5.6 percent in 2019), driven by the vigorous implementation of economic reform programmes and gas extraction in the Zohr field.

Other countries with growth accelerations include Algeria (from 1.4 percent in 2018 to 2.3 percent in 2019) and Mauritania (3.6 percent to 6.7 percent).

“However, the region’s performance was weighed down by slower growth in Libya, from 7.8 percent in 2018 to 4.0 percent in 2019, owing to disruptions in oil production as a result of deteriorating security, weak growth in the nonoil sector, and poor public utility provision, especially in electricity,” the report says.

In West Africa, growth picked up from 3.4 percent in 2018 to 3.7 percent in 2019. Top performers include Ghana (from 6.3 percent to 7.1 percent), driven largely by growth in the mining and petroleum sectors in addition to strong agricultural growth; and Côte d’Ivoire (7.4 percent in both years), spurred by sustained public investments.

Nigeria continued to recover gradually to 2.3 percent in 2019 from 1.9 percent in 2018.

In Central Africa, growth is estimated to have increased from 2.7 percent in 2018 to 3.2 percent in 2019. Most countries in the region witnessed growth accelerations between 2018 and 2019, except for the Democratic Republic of Congo, where growth slowed from 5.8 percent to 4.3 percent, due primarily to uncertainties over the political transition and to the Ebola outbreak in late 2018 and its persistence into 2020.

Between 2000 and 2014, Africa achieved one of its longest episodes of sustained economic growth since the 1960s. And despite a sluggish global economy after 2014, Africa’s growth has remained resilient. But what really matters for the populations, the report says, is not only the level of growth (quantity of growth) but also its quality: has Africa’s growth performance been equitable and inclusive?

The report says that although many countries have experienced strong growth episodes, relatively few have posted significant declines in extreme poverty and inequality, which remain higher than in other world regions.

“Growth is generally considered inclusive if its benefits are widely shared across all the segments of the population — that is, if it simultaneously reduces extreme poverty and inequality,” the report says.

It says growth will reduce poverty if the mean income or consumption of the poor rises and inequality if the welfare of the poor grows faster than that of the rest of the country.

Economic growth in Africa is estimated at 3.4 percent for 2019, about the same as in 2018.

Although stable, this rate is below the decadal average of 5 percent growth for the region. The slower than expected growth is partly due to the moderate expansion of the continent’s big five —  Algeria, Egypt, Morocco, Nigeria, and South Africa, which jointly grew at an average rate of 3.1 percent, compared with the average of 4.0 percent for the rest of the continent. Growth is forecast to pick up to 3.9 percent in 2020 and 4.1 percent in 2021.






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