Africa’s Macroeconomic Performance and Prospects

This year’s African Economic Outlook examines recent macroeconomic developments and the outlook in Africa, focusing on the implications of external imbalances for growth and the financial and monetary challenges of integration...

Africa’s Macroeconomic Performance and Prospects

If you’re looking to get up to speed on the most recent investment and development opportunities in fields such as, Energy, Infrastructure/Construction, Investment, Finance, Economy related, Information Technology, Healthcare, Automation, Agribusiness etc on the African Continent.

The Major Economic Indicators and Indices of Africa to reckon for the many investment opportunities.

This year’s African Economic Outlook published by The African Development Bank examines recent macroeconomic developments and the outlook in Africa, focusing on the implications of external imbalances for growth and the financial and monetary challenges of integration. It next discusses employment creation through the analysis of firm dynamism. It then explores the economics of regional integration in Africa and the policies that can make it deliver economic prosperity.

Here are the major highlights to reckon:

Africa’s Macroeconomic Performance And Prospects

Africa’s economic growth continues to strengthen, reaching an estimated 3.5 percent in 2018, about the same as in 2017 and up 1.4 percentage points from the 2.1 percent in 2016.

East Africa’s Promising Growth Leading to more developmental opportunities.

East Africa led with GDP growth estimated at 5.7 percent in 2018, followed by North Africa at 4.9 percent, West Africa at 3.3 percent, Central Africa at 2.2 percent, and Southern Africa at 1.2 percent.In the medium term, growth is projected to accelerate to 4 percent in 2019 and 4.1 percent in 2020.

The Case Study of East Africa and its promising growth.

East Africa, the fastest growing region, is projected to achieve growth of 5.9 percent in 2019 and 6.1 percent in 2020. Between 2010 and 2018, growth averaged almost 6 percent, with Djibouti, Ethiopia, Rwanda, and Tanzania recording above-average rates. But in several countries, notably Burundi and Comoros, growth remains weak due to political uncertainty.Growth in Central Africa is gradually recovering but remains below the average for Africa as a whole. It is supported by 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. Southern Africa’s subdued growth is due mainly to South Africa’s weak development, which affects neighboring countries.

The major industry players has promising growth and can contribute to massive developmental opportunities in Africa.
Africa’s viable potentialities of eventual significant economic growth with time.

And though lower than China’s and India’s growth, Africa’s is projected to be higher than that of other emerging and developing countries. But it is insufficient to make a dent in unemployment and poverty. Of Africa’s projected 4 percent growth in 2019, North Africa is expected to account for 1.6 percentage points, or 40 percent. But average GDP growth in North Africa is erratic because of Libya’s rapidly changing economic circumstances.

The drivers of Africa’s economic growth are gradually rebalancing.

The drivers of Africa’s economic growth have been gradually rebalancing in recent years. Consumption contribution to real GDP growth declined from 55 percent in 2015 to 48 per-cent in 2018, while investment’s contribution increased from 14 percent to 48 percent. Net exports, historically a drag on economic growth, have had a positive contribution since 2014.

Fiscal positions are gradually improving. Between 2016 and 2018, several countries achieved fiscal consolidation by increasing tax revenue and, at times, lowering expenditures. Revenue increases were due partly to higher commodity prices and increased growth, but several countries also implemented tax reforms. Domestic resource mobilization has improved but falls short of the continent’s developmental needs.Although current account deficits have been deteriorating, total external financial inflows to Africa increased from $170.8 billion in 2016 to $193.7 billion in 2017, which represents a 0.7 percentage point increase in net financial inflows as a ratio of GDP (from 7.8 percent in 2016 to 8.5 percent in 2017).

Growth accelerations and job growth.

Africa has achieved one of the fastest and most sustained growth spurts in the past two decades, yet growth has not been pro-employment. A 1 percent increase in GDP growth over 2000–14 was associated with only 0.41 percent growth in employment, meaning that employment was expanding at a rate of less than 1.8 percent a year, or far below the nearly 3 percent annual growth in the labor force.


Growth Acceleration according to the various episode indicators

In Africa, most growth acceleration episodes were associated with a reallocation of labor to services (18 of the 20 episodes) and to industry (16 of the 20 episodes). Of nine industry-driven growth acceleration episodes, seven were characterized by a higher growth in employment shares in industry than in services.

Growth acceleration episodes are also associated with a rise of employment in the mining sector (10 of the 20 episodes), confirming the specific role of the extractive sector in Africa. The overall picture is consistent with the notion that growth accelerations are associated with structural change.

In Conclusion, the recent status quo of the General African Economic outlook pertaining to development, investment and all the other key economic pointers align to give you the investor, business owner, entrepreneur the confidence to do business with the vast industry opportunities it presents. Which includes, that the drivers of Africa’s economic growth are gradually rebalancing, Fiscal positions are gradually improving. Growth accelerations and job growth are improving with time.

Source: The African Development Bank publication : African economic outlook

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