Africa’s economic growth declined to stand at 1.7 per cent in 2016, down from 3.7 per cent in 2015, the United Nations Economic Commission for Africa said in a recent report.
The report ascribed the drop to a decline in commodity prices since 2014, in addition to the effect of slowdown of the Chinese economy and the higher global interest rates, which weighted on the ability of African countries to take external debts. Moreover, the negative impact of the environment on agricultural production in Morocco, Algeria and Malawi as well as a lack of political and security stability in central Africa’s countries also contributed to the decreased growth. The report said that North Africa witnessed a decline in growth to stand at 2.6 percent in 2016, driven by slower growth in Algeria, Egypt and Morocco.
“Low oil prices weighed on public investment and private consumption in Algeria; Egypt was hurt by tourism’s weaker performance and a consequent decline in foreign currency earnings; and Morocco was affected by drought which hit agriculture, crimping private consumption and government spending,” the report read.
The balance of payments’ deficit widened to 7 percent, which drove the countries to debt. The African economy is expected to grow 3.6 percent during 2017, as a result of weakened economic conditions of some mega countries.
Khaled A. Hussein, Chief of the Forecasting Section of Macroeconomic Policy Division at the Commission, said the decline in growth reflected the weakening in economic conditions in Africa’s largest economies, such as Nigeria, 1.6 per cent; South Africa, 0.6 per cent; and Egypt, 3.4 per cent. He said that the commission believed in the importance of transforming African countries from an economy based on agriculture to a diversified one, in which industry plays a vital role.
The report recommended the importance of implementing structural transformation towards manufacturing and fast regional merger through the continental free trade agreement.
17 September 2017