confidentially speaking
The Africa Confidential Blog
In search of green shoots
Blue Lines
Caught between a more slowly growing China and the nationalist and
protectionist reflexes of President Donald
Trump's United States
government, Africa is in pressing need of an economic boost. Last year
marked a harsh coda to the commodity boom, with the continent's biggest
economies treading water or in recession. Initially, the international
financial institutions forecast a turnaround starting in 2017 after
average growth rates of 1.3%, the lowest for two decades. Already they
are qualifying their optimism.
Both the International Monetary Fund and World Bank have cut
their average African growth forecasts to 2.6% this year, down from
January’s 2.9%. They have also cut Africa growth forecasts by four
percentage points for 2018. Four key factors inform the grimmer
predictions: continuing weakness in the four biggest economies
(Nigeria, South Africa, Egypt and Algeria) which make up almost
two-thirds of African output; continuing low foreign and local
investment; shrinking access to international finance for companies and
governments; and heightened political risks, such as the lack of
effective policies in South Africa or Nigeria, prospects of difficult
elections and transitions in Kenya
and Angola, and conflict in
Congo-Kinshasa.
Again, impressive growth is forecast in the brightest economic
spots, such as Ethiopia, Senegal and Tanzania, but their economies are
still not big enough to power a more generalised regional recovery.
