AFRICA ECONOMIC OUTLOOK

Central Africa

Central Africa’s growth accelerated in 2014 to 5.6% from 4.1% in 2013. Economic conditions are, however, quite different between countries. The Central African Republic is affected by a political and security crisis. Despite some moderate growth, gross domestic product (GDP) will remain much lower than before the conflict broke out at the end of 2012. In Equatorial Guinea, GDP continues to fall due to lower oil production. All other countries in the region should remain on a relatively high growth path. Despite some damage from lower commodity prices, the mining sector and related investment remain the main engines of growth in the region. But in some of the countries, such as in Cameroon, the Democratic Republic of the Congo, Gabon, and Sao Tome and Principe, growth is broader based.

Projected Real GDP Growth % 2016

• Cameroon: 5.5
• Central African Republic: 4.0
• Chad:  5.0
• Congo:  7.3
• Congo, Dem. Rep.:  8.2
• Equatorial Guinea:  1.9
• Gabon:  4.7
• Sao Tome and Principe: 5.4

East Africa

East Africa’s growth accelerated in 2014 to more than 7%, from below 5% in 2013. It is projected to decelerate to 5.6% in 2015 and accelerate again to 6.7% in 2016. East Africa will then again become the continent’s fastest growing region. East Africa recorded the highest increase in foreign direct investment in 2014. Fluctuations in East African average growth are due to volatile development in South Sudan, where armed conflict cut oil production and GDP in 2013. It recovered in 2014 but is projected to decline again in 2015, although forecasts for this country are highly uncertain and depend on the evolution of the peace process. Ethiopia, Kenya, Rwanda, the United Republic of Tanzania and Uganda kept up their relatively high growth. As these countries have small mining sectors and their manufacturing is also not very large, or has declined as a percentage of GDP, their growth is more driven by services and construction. But countries are achieving growth with different degrees of sectoral transformation. In Ethiopia structural changes are most pronounced with the share of agriculture in GDP shrinking (although remaining higher than in the other countries) and services expanding more than in the other countries. In Sudan, growth remains weaker as the economy is still coping with the shock of South Sudan’s secession in 2011 and the loss of oil revenues.

Projected Real GDP Growth % 2016

• Burundi: 5.0
• Comoros:  3.6
• Djibouti:  6.2
• Eritrea:  2.0
• Ethiopia:  8.7
• Kenya: 6.3
• Rwanda:  7.5
• Seychelles:  3.6
• Somalia: N/A
• South Sudan: 15.5
• Sudan:  3.7
• Tanzania: 7.2
• Uganda:  6.5

 North Africa

North Africa’s growth remains uneven as fallout from the uprisings of 2011 is still affecting countries. Libya is highly unstable with power struggles between different groups and a collapse of political and economic governance. Its oil production declined again in the first half of 2014. Despite some recovery in the second half, growth was again negative in 2014 and prospects are highly uncertain. By contrast, in Egypt and Tunisia greater political and economic stability is helping to improve business confidence. The gradual recovery of export markets and improved security should support growth, including in tourism, although in Tunisia terrorist attacks have created new concerns. Algeria’s oil production increased for the first time in eight years and is boosting growth together with the non-oil sector. In Morocco, agricultural production declined in 2014 from its exceptionally high level in 2013 and reduced GDP growth. But assuming normal harvests and better export markets, growth is expected to accelerate. Mauritania continues to achieve the highest and steadiest growth in the region, supported by favourable macroeconomic and structural policies. This was mainly boosted in 2014 by parts of the mining sector (iron ore) and construction and on the demand side by private consumption and private investment. The exceptionally high total investment of around 45% bodes well for future growth.

Projected Real GDP Growth % 2016

• Algeria:  4.0
• Egypt:  4.3
• Libya:  6.3
• Mauritania:  6.8
• Morocco:  5.0
• Tunisia:  4.1

Southern Africa

Southern Africa’s growth slowed to below 3% in 2014, and only a moderate recovery is projected for 2015 and 2016. The subdued performance is due to the relatively poor growth in South Africa. The key economy’s growth fell to 1.5% in 2014 from 2.2% the previous year. It suffered from weakened demand in trading partners and lower prices for its raw materials, while labour unrest and electricity shortages disrupted economic activity. South Africa’s growth is projected to recover gradually on the back of more buoyant export markets and improved competitiveness due to the large depreciation of the rand. In Angola, growth also decelerated due to the oil price fall, a temporary reduction in oil production as well as a drought, which reduced agricultural production. Angola’s growth is projected to remain lower than for most of the past decade as government expenditures are depressed due to lower oil revenues. Mozambique and Zambia are achieving the highest growth in the region. Mozambique is mainly driven by so-called mega projects and large infrastructure investment, financed by foreign direct investment and the government. In Zambia, good harvests boosted 2014 growth and mitigated the effect of lower growth in mining, manufacturing and services. Growth is expected to remain strong in both countries, but more efforts are needed to broaden the economy and make growth more inclusive.

Projected Real GDP Growth % 2016

• Angola: 4.2
• Botswana:  4.3
• Lesotho:  5.1
• Madagascar: 5.1
• Malawi:  5.7
• Mauritius: 3.6
• Mozambique:  8.1
• Namibia:  6.4
• South Africa:  2.5
• Swaziland: 2.4
• Zambia:  6.6
• Zimbabwe:  3.3

 West Africa

West Africa achieved relatively high GDP growth of 6% in 2014 despite the outbreak of Ebola in the region. The virus significantly reduced growth in the most affected countries: Guinea, Liberia and Sierra Leone. In Nigeria, Africa’s largest country, growth accelerated to 6.3%, from 5.4% in 2013. It was again driven by the non-oil sector, notably services, manufacturing and agriculture, which shows that Nigeria’s economy is diversifying. Its oil and gas sector has declined to around 11% of GDP and is now a similar size to manufacturing at around 10% of the total. Benin, Côte d’Ivoire, Niger and

Togo also remained on a relatively high growth path. But growth slowed in Ghana, and Gambia’s economy shrank slightly. West Africa’s growth is projected to become more moderate in 2015 and to strengthen again in 2016, driven mainly by Nigeria.

Projected Real GDP Growth % 2016

• Benin:  6.0
• Burkina Faso: 7.0
• Cabo Verde:  3.6
• Côte d’Ivoire:  8.5
• Gambia:  5.2
• Ghana:  5.9
• Guinea:  4.3
• Guinea-Bissau: 3.7
• Liberia: 6.4
• Mali:  5.1
• Niger:  6.5
• Nigeria:  6.0
• Senegal: 5.0
• Sierra Leone:  2.8
• Togo: 5.9