Tuesday, April 23, 2024

AFDB pegs African economic growth for 2019 at 4%


Africa’s GDP growth is projected to reach four per cent in 2019 and 4.1 per cent in 2020, according to the African Development Bank (AfDB).

According to the annual economic outlook report, recovery in commodity prices will drive domestic demand and infrastructure investment across the continent even in 2019.

The report comes around the same time when Botswana’s finance minister Kenneth Matambo has also projected a similar growth for the local economy.

Presenting what has been themed as the “transformational budget” at Parliament this past week, Matambo said that Botswana’s economy projected to slow down, expanding by 4.2 percent in 2019 from 4.5 percent in 2018.

Mineral revenue remains the highest contributor to government coffers in Botswana at P21.09 billion or 35.62 percent of total revenue and grants, while customs and excise revenue is estimated at P14.02 billion. Non- mineral income tax is estimated at P11.55 billion, while VAT is expected at P9.12 billion.

Meanwhile, as millions of young people in Africa join the labor market, the pressure to provide decent jobs is expected to intensify. AFDB says at the current rate of labor force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising.

A 1 percent increase in GDP growth over 2000 to 2014 was associated with only 0.41 percent growth in employment, meaning that employment was expanding at a rate of less than 1.8 percent a year, or far below the nearly 3 percent annual growth in the labor force.

“If this trend continues, 100 million people will join the ranks of the unemployed in Africa by 2030,” a statement from the report said.

Further it said without meaningful structural change, most of the jobs generated are likely to be in the informal sector, where productivity and wages are low and work is insecure, making the eradication of extreme poverty by 2030 a difficult task.

Nearly 82 percent of African workers, a majority of them in the informal sector, are considered working poor, well above the world average of 39 percent. Moreover, low-productivity employment in the informal economy is highly correlated with inequality.

Yet, the informal employment rates vary as there is higher proportion of women’s employment (79 percent) than of men’s (68 percent) in Africa.

“In all regions of the world, people with less education are more likely to be informally employed. Informality is highest among workers with no education. In Africa, 94 percent of workers with no education are informally employed,” the report added.

In Botswana, statistical agency – Statistics Botswana has also recorded that females tend to suffer slightly more than their male counterparts at 26.8 percent compared to 23.5 percent of the unemployed males.

The Botswana Multi Topic Household Survey (BMHS) survey has found out that by education level, those who only completed Junior Certificate level are the ones mostly affected by this pickle, constituting 42 percent of the total unemployed youth.

Followed by senior secondary school leavers and university/college graduates with 28.1 and 13.1 percent of the total respectively.

By region, it reported that the youth in urban villages are the mostly unemployed at 51.4 percent, followed by those in rural areas at 27.2 percent while youth in towns and cities creates 21.4 percent.


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