Africa’s economic growth heads for 22-year low

Expectations for economic growth this year in sub-Saharan Africa have plummeted to just 1.5 per cent following sharp downgrades to forecasts for Nigeria, Ivory Coast and Angola in the past few weeks.

The figure, a fraction of the 4.2 per cent growth foreseen at the start of the year, would represent the weakest pan-continental growth since 1994 and mean a cut in income per head in the world’s poorest region, given annual population growth of around 2.5 per cent.

Although most economists expect a pick-up in growth in 2017, expectations for next year have also fallen sharply in recent months, from 4.2 per cent in June to 3.2 per cent, according to consensus estimates collated by Focus Economics.

The IMF now predicts that 2017 will be the second successive year in which sub-Saharan growth will undershoot global growth — widening inequality and returning to the pattern of the 1990s, when Africa routinely under performed global norms — before a predicted recovery thereafter, as the second chart shows.

John Ashbourne, Africa economist at Capital Economics, says: “The region’s economic downturn has still yet to bottom out. Major economies across Africa either remained weak or deteriorated over the past few months. GDP per capita will be stagnant or falling in a lot of countries again next year.”

Dirina Mançellari, senior economist at FocusEconomics, adds: “The [sub-Saharan] economy decelerated in the first half of 2016 and monthly indicators from major economies point to another weak expansion in the second half.”

Elsewhere, Nigeria’s economic crisis “remains very grave”, Mr Ashbourne says, with the economy contracting by 2.2 per cent in the year to the third quarter, an acceleration of the rate seen three months earlier.

Oil production, which has fallen to a 33-year low amid an insurgency in the Niger Delta, probably fell further still in November, he believes, while “other available activity data for Q4 also paint a pretty bleak picture”.