Africa’s economy will continue to grow in the next two years according to AFDB

Output growth in African economies is projected to witness a 4.1 percent growth in 2018 and 2019, the African Development Bank (AfDB) said in its 2018 edition of African Economic Outlook released on Tuesday.

According to the report, economic growth varied widely across countries in Africa’s five sub regions as some African countries performed remarkably well while others experience tepid growth. However, overall growth in 2016 stood at 2.2 percent, rebounding to 3.6 percent average real GDP and is projected to grow to 4.1 percent in 2018 and 2019.

The economic outlook for the Western African region rebounded to 2.5 percent in 2017, after a stagnant 0.5 percent in 2016 and is projected to rise to 3.8 percent in 2018 and 3.9 percent in 2019. The decline in the price of raw materials and the unimpressive performance of Nigeria, which alone accounts for about 70 percent of the sub region’s GDP, were some of the key factors responsible for the 2016 stagnation.

Recovery in oil prices, coupled with strong agricultural performance bolstered production in 2017 in the West African region. Growth in the region is still tepid at 0.8 percent and Nigeria which is still recovering from recession is projected to experience a less than average than other countries.

East Africa, comprising of thirteen countries, recorded the continent’s best economic performance with a GDP growth rate of 5.9 percent in 2017 −a rate above the continental of 3.6 percent. East African region recorded a cumulative good performance in six countries: Ethiopia, Tanzania, Djibouti, Rwanda, Seychelles and Kenya. The outlook remains positive for 2018 and 2019, with growth expected to continue at 5.9 percent and 6.2 percent respectively.

North Africa recorded the second-highest growth rate in Africa at 5.0 percent in 2017, up from 3.3 percent in 2016. The sub region’s growth is projected to accelerate to 5.1 percent in 2018, slowing to 4.5 percent in 2019.

Improved oil production in Libya and Morocco, boosted the region’s growth from 1.2 percent in 2016 to 4.1 percent in 2017, while Egypt’s macroeconomic and structural reforms contributed a 4 percent growth that same year. Overall, the region’s economic performance is above the 3.6 percent average for the continent and has a positive outlook projection.

Growth in Southern Africa nearly doubled in 2017 to 1.6 percent, up from 0.9 percent in 2016 and is expected to improve to 2 percent in 2018 and 2.4% in 2019. According to Deputy Director General of the Bank for Southern Africa, Josephine Ngure “the Southern Africa region has made considerable progress in the fight against poverty and improvements in the quality of life of its inhabitants, through the implementation of policies targeting the acceleration of industrialization and the promotion of growth and job creation.”

The Central Africa region has continued to underperform, as the region recorded 0.9 percent real GDP in 2017, the lowest growth rate of the continent. However, the Republic of Congo will bolster growth in the region, which is expected to pick up to 2.6 percent in 2018 and 3.4 percent in 2019.

To ensure an overall positive outlook for the continent, the report noted that the infrastructure investment drive in the region, financed largely by external borrowing, needs careful monitoring to ensure that revenue streams are strong enough to meet the debt obligations when they fall due.  Adding that, fiscal policy should not undercut the growth-promoting effects of the recent surge in public investment thereby, reversing the inroads made in poverty reduction, health, and education across the continent.