The Africa Confidential Blog
Africa joins the global slowdown
Batten down the hatches. Shorn of its economic diplomat-speak, the World Bank's latest update for Africa sounds a loud warning about rising poverty, the debilitating effects of discrimination against women and galloping government debt, especially to commercial lenders. The Bank starts its case with another set of lacklustre growth figures for the region. Africa's economies will expand on average by 2.6% this year – 0.2% lower than the Bank's forecast in April – compared with 2.5% last year. This means many countries' economies – apart from Ghana, Ethiopia, Rwanda and Mauritius – are growing slower than their populations, pushing down per capita growth figures further as inequality increases.
It quickly attributes much of the slowdown – compared to the boom years of 2005 to 2015 – to global uncertainties such as the trade war between the United States and China, weaker demand for Africa's export commodity and the effects of climate change. And it expects the price of oil and metal exports to remain below their 2018 level. It is no compensation that the Bank points out that growth will contract faster in the Middle East, Latin America and South Asia. That means African exporters cannot expect to expand trade much in those areas.
Within Africa, the poor performance of Angola, Nigeria and South Africa along with mounting political problems in Algeria and Egypt also limits the scope of the much-trumpeted continental free trade area set to take off next year.