Economic growth in East Africa outperforms peers at close to 7 percent, the regional economic outlook reports of the African Development Bank (AfDB) show, putting growth in other region on a positive but cautious scale.
The bank launched four of its five regional economic outlook reports this week in Abuja, Yaoundé, Nairobi and Pretoria, with forecasts for Central, West, East and Southern Africa.
AfDB envisions that the East Africa, with an estimated growth of 5.9 percent in 2019 and 6.1 percent in 2020, will soon be an attractive destination for foreign investment in the continent.
The region is expected to expand on the back of improved services sector performance in Tanzania and Kenya, higher agricultural output and bettered consumption.
Ethiopia is tipped to lead the region with a predicted 8.2 percent growth in 2019, ahead of Rwanda (7.8%), Tanzania (6.6%), Kenya (6%), Djibouti (5.9%) and Uganda (5.3%).
West Africa’s 15 economies seem to be diverse across many dimensions of development, with per capita income spanning between $452 in Niger to $3,678 in Cabo Verde. The regional economy notched up to 3.3 percent in 2018 from 2.7 percent in 2017, and predicted to hit 3.6 percent in 2019 and 2020.
On why institutional mechanism in West Africa is weak, the outlook says, “Weak transparency and accountability and political instability and fragility have historically prevented West African countries from mobilising enough domestic resources to meet developmental needs.”
The West Africa Regional Outlook charged governments within the region to devise creative means of expanding revenue through reforms that enhance tax collection, curb tax evasion and illicit monetary flows.
The report for the Central Africa reveals that growth in the region is gradually picking up, buoyed by rebound in oil prices. The region expanded 1.1 percent in 2017 to 2.1 percent in 2018, and projected to grow by 3.6 percent and 3.5 percent in 2019 and 2020, respectively, if only the region can leverage macroeconomic reforms, natural resources and rising oil prices.
Despite being among the least integrated in Africa and faced with myriad of challenges such as insecurity, poor business climate, poor infrastructures and weak diversification, the region still has potentials for reforms and vibrant linkages, the report notes.
Growth in the region, according to the report, was driven by positive net-exports and investments as well as higher commodity prices. Sustained momentum in prices premised on strong global demand could elevate growth to medium term.
“Major risks for the region’s economic prospects in 2019-20 include fragile security conditions in Mali, Niger and Nigeria,” says the report.
The Southern African region is anticipated to expand slower than peers at 2.2 percent in 2019 and 2.8 percent in 2020 on the back of elevated inflationary pressure, rising public debt and tepid growth in South Africa, the largest economy in the region.
Going further, oil-rich Angola is expected to expand by 1.2 percent and 3.2 percent in 2019 and 2020, respectively, while Mozambique will grow by 4.5 percent and 5.0 percent this year and next year.
The bank maintains that job creation and regional integration remain a major concern and regions must synergise to keep up growth rates.
“Job creation and ramping up manufacturing will continue to be major priority areas for creating growth and employment across the continent,” the bank states.
