However many visionaries have since seen Africa beyond this designation. Amongst them is Liberian President, Ellen Johnson-Sirleaf who has completely dismantled the narrative that Africa has historically been burdened with. She regenerated a new perspective giving hope to Africa and her descendants with these profound words: “Africa is not poor, it is poorly managed.”
The ‘Africa Markets Reveled Update’ compiled by Stanbic Bank uniquely describes the different forms of fragility that the Sub Saharan countries find themselves in. How Africa will navigate through the headwinds it is currently facing will have a lot to tell about its ability as a continent to gain an air of respect. The manner in which Africa will emerge from its challenges will in part determine how the African states will manage their respective growth paths going forward.
Botswana: “Challenging times”
The report outlines that the contraction of Botswana’s economic growth is in large due to the sluggish global growth that persistently depressed commodity prices. This is because mining production is the country’s significant contributor to GDP, estimated at 18 percent of real GDP. According to the report the country’s economic growth contracted by 0.3% y/y in 2015, much lower than the government’s 2.6% y/y estimate which later was revised to 1% y/y, and a far cry from the average outcome of 6.4% y/y in the preceding five years.
“We forecast GDP growth to rebound to a relatively modest 3.8% y/y this year and 4% y/y in 2017. Over the next six years, the government hopes to lift GDP growth to an average of 4.4% y/y. We see downside risks to that forecast unless ongoing efforts at diversifying the economy are stepped up meaningfully. A strong recovery in commodity prices would also help,” cites the report.
Namibia: “Committed to consolidation”
The report expects growth in Namibia to consolidate around 4.2 percent year on year in 2016 and to average some 4.5%-5.0% y/y over the coming 3 years. It highlights that growth decelerated from 6.4% y/y in 2014 to an estimated 4.5% y/y in 2015.
“Government consumption growth is also likely to remain weak thanks to ongoing budget consolidation plans focused on cutting non-essential operational expenditure, postponing non-productive capital spending and reprioritizing other fiscal outlays. Elsewhere, the ongoing weakness in both the price and demand for key exports such as diamonds and uranium will place a lid on net exports ÔÇô even if import growth slows somewhat as ongoing mega projects reach completion,” posits the report.
The report anticipates that the recent currency depreciation should be supportive of inward tourism.
South Africa: “poor growth”
South Africa’s volatility has been touted widely and extensively over the past months. The report estimates that drought will reduce GDP growth by 0.4 percentage points in 2016. Generally, it anticipates that growth for 2016 and 2017 of 0.6 percent and 1.2 percent respectively, unchanged from March this year.
“Worth noting is that there appears to be some life returning to sectors within the South African economy which have been struggling. This rebound however is off a very low base. Most recently, the BER manufacturing PMI indicates signs of life in the manufacturing industry,” cites the report.
Zambia: “rough waters ahead of elections”
The report details that downside risks of Gross Domestic Product (GDP) growth persist and subscribes that the downturn is multifaceted. Low commodity prices, given Zambia’s reliance on its copper industry (mining and quarrying makes up roughly 10.0% of GDP), which is responsible for 77.2% of Zambia’s export earnings and adverse weather conditions and their effect on energy supply to the productive sectors of the economy are blamed on the downturn.
The analysis of the country’s growth highlights an expectation that GDP growth will slow further in 2016 to 3.2 percent year on year sliding down from what had been estimated in 2015 at 3.4 percent year on year. “We are slightly more optimistic on growth in 2017 and expect GDP growth to pick up slightly to 3.8% y/y as energy supply, mining activities and agricultural output improves,” states the report.
From the information garnered from the report, it is worth mentioning that although challenges are pronounced across Africa they are however not unique to any one particular region but affect the entire global economy. The difficulties in Africa could be looked at in two ways; the first is where Africa will look to seeing as it is backed against a corner and second is how Africa will rise from these difficult and fragile times. The second outlook posits that Africa is given the opportunity to prove the ‘new generation narrative’ which proclaims that it is rising. This is not to paint oblivion to the present uncertainty and volatility, but Africa’s rising will go a long way in redefining the manner in which the continent has been looked down on.