Industrializing through Trade (10) - Rawan For Media Artistic and Production
Trade
continues to play a vital role in Africa’s economic growth performance
and it has potential to promote trade induced industrialization.
Growth is expected to increase across all economic groups
Moderate
growth is expected in all the economic groups in 2015. Oil-exporting
countries (excluding Libya) grew fastest, by 4.7 per cent, in 2014, from
4.4 per cent in 2013. Despite falling oil prices, growth in those
economies as a group is expected to rise to 5.2 per cent in 2015. The
recovery of growth in consumption and investment in 2015 will counter
any further potential slowdown in growth in oil-exporting countries.
Growth
of oil-importing countries is expected to move up a little to 3.8 per
cent in 2015, after stagnating at 3.3 per cent in 2013 and 2014. Growth
will be supported by low oil prices and continued consumer and business
confidence. Growth in private consumption and investment is expected to
increase to 4.1 per cent and 2.8 per cent, respectively, in 2015 in
those economies.
Despite
the steep drop in global oil prices, the overall impact on Africa has
been very small, unlike the oil price shock felt in 2008.
Mineral-rich
countries are expected to build on their growth momentum and accelerate
from 3.3 per cent in 2014 to 3.9 per cent in 2015, mainly because of
increased investments and new mineral discoveries in Angola (coal),
Botswana (copper, coal and diamonds), Ghana and Liberia (gold), Namibia
(uranium and diamonds), Sierra Leone (iron ore and diamonds), and Zambia
(copper).
Growth
across all economic groups will be supported by an increase in private
consumption and investments, but growth in net exports and government
consumption will continue slowing.
Growth varies between subregions
Subregional
growth variations are expected to continue in 2015. GDP growth in
Central Africa is expected to rise from 4.3 per cent in 2014 to 4.8 per
cent in 2015. Strong public spending on capital intensive infrastructure
in Cameroon and the Congo and new oil and gas developments in Cameroon
and Chad are expected to drive growth.
However,
political instability in the Central African Republic and labour unrest
and worsening problems with the sole refinery in Gabon are challenges.
Growth
in East Africa is expected to increase from 6.5 per cent in 2014 to 6.8
per cent in 2015, driven by Djibouti, Kenya and Uganda. Growth in
Kenya, the subregion’s biggest economy, will benefit from rapid
expansion of banking, telecommunications, urbanization, and investment
in infrastructure, particularly rail. Uganda’s growth will be supported
by increasing activity in construction, financial services, transport
and telecommunications.
Growth
in North Africa (excluding Libya) is expected to climb to 3.6 per cent
in 2015 from 2.7 per cent in 2014, as stability consolidates in the
subregion’s largest economy, Egypt. Growth is also expected to be
supported by government spending on infrastructure, underpinned by
improving political stability in Egypt and Tunisia, and strong growth in
private consumption and investment. Weak commodity prices; tight
monetary policies in
Algeria, Egypt, Morocco and Sudan; and political instability in Libya may upset those forecasts.
Southern Africa’s growth is expected to accelerate from 2.9 per cent in 2014 to 3.6 per cent in 2015.
Angola,
Mozambique and Zambia will stay the fastest-growing economies. Growth
will be driven mainly by investment in the non-diamond sector in
Botswana, recovery in private consumption in South Africa, increased
investment in mining and natural gas exploration in Mozambique, and
generally by private consumption. A continued slowdown in oil and
mineral prices may derail those forecasts, as two thirds of those
countries are mineral rich or oil exporting.
West
Africa’s growth is expected to increase from 5.9 per cent in 2014 to
6.2 per cent in 2015, although forecasters are wary of political
instability in Mali and Nigeria-whose economy was recently rebased (in
the process of replacing present price structure (base year) to compile
volume measures.
10
Africa’s
GDP growth increase reflected GDP rebasing primarily in Nigeria but
also in Ghana, Kenya, Tanzania, Uganda and Zambia. Rebasing also reduced
their debt-to-GDP ratios, which improved their capacity to borrow on
domestic and international markets and helped to lift investment in
their productive sectors. And as rebasing also helps to better assess
economic sectors with potential to grow, resources targeted to those
sectors could boost productivity in those countries.
Regular
GDP rebasing is central to evaluating an economy’s growth and its share
in world GDP. In Africa, the number of countries with outdated base
years outnumber those with updated base years, so rebasing GDP figures
is long overdue for many countries. The six countries mentioned at the
beginning of this box have rebased their GDP in recent years.
Identifying previously unregistered activities through rebasing of the
countries’ GDP in the informal sector and the telecommunications and
entertainment subsectors provides a better idea of their relative
importance in the economy. Changes after rebasing are illustrated in the
table below for Ghana.
Rebasing
in Ghana leads not only to an overall expansion but to a structural
shift towards services, as the shares of agriculture and industry
decline. The growing evidence of structural change in Africa indicates
the need for African countries to rebase their GDP to better understand
that change. Other important effects of rebasing include a decline in
tax- and debt-to-GDP ratios, and growth in Africa’s share in world GDP.
Overall however the impact of rebasing on growth generally is small and
depends on the number of years between revisions.
Ebola's negligible economic effects on Africa
The
three EBOLA-affected countries of Guinea, Liberia and Sierra Leone will
suffer GDP loss, but because in 2013 the three countries accounted for
2.4 per cent of West Africa’s GDP and only 0.7 per cent of Africa’s GDP,
the economic effects on West
Africa will be minimal; on the continent, miniscule.
Forecasting
Model), EBOLA in both 2014 and 2015 will for West Africa take off 0.1
percentage point from GDP growth and for the entire continent a mere
0.02 percentage point (for West Africa, the forecasts are nudged down
from 5.9 per cent in 2014 and 6.2 per cent in 2015; for Africa as a
whole, from 3.37 per cent and 4.61 per cent).
An alternative simple projection forecasts less optimistic but broadly similar figures.
ECA
assumes a benchmark scenario in which all three countries register
growth of 0 per cent in 2014 and 2015, whereas projected growth rates
for the other African countries remain unchanged. The model finds that
growth projected for West
Africa decreases by 0.19 percentage point in 2014 and by 0.15 percentage point in 2015; for Africa as a whole, the loss will be
0.05 percentage points in 2014 and 0.04 percentage points in 2015.
By United Nations Economic Commission for Africa, 17 hours 55 minutes ago
