Despite the Southern African Development Community (SADC) contending with market conditions that inhibit the region’s growth; the bloc says regional overall economic performance showed marginal growth in 2015.
While external factors have largely contributed to the current unsatisfactory performance of the region, internally, many economies of the region remain undiversified and as such are unable to absorb economic shocks, including falling commodity prices. The fall in international oil prices and climate change factors including drought and floods have also affected economic performance of member states to varying degrees.
Global head in Commodities research at Standard Bank Walter De Wet who spoke at the Mining and Metals conference recently said the drought negatively affected food prices in the Sub Saharan region, specifically maize prices. He however said that their forecast gives them a fairly high conviction that the drought will not repeat itself come the next rain season. “We do think food prices will come down too,” he said. Based on De Wet’s positive prediction, the region’s economic performance could begin to pick in response to the favourable weather conditions.
The regional average real gross domestic product (GDP) continued to slowdown averaging 2.8 per cent in 2015 compared to 3.3 per cent in 2014. Only DRC and Tanzania recorded real GDP growth rates above the regional target of 7 percent. The economic growth in the SADC region for 2016 is expected to be at the same level of 2015.
It was highlighted at the recent SADC summit that export volumes declined, generally because of low demand due to weak global economic recovery, whilst import volumes increased marginally.
According to information from the summit “the region’s cereal demand and supply analysis shows that the region recorded an overall cereal deficit of 9.3 million tonnes for 2016/17 marketing year and that only one country, Zambia recorded a cereal surplus.” The food insecurity challenge was reiterated citing that about 40 million people in the region are food insecure and also that it is necessary for the region to rise to the occasion and institute the necessary mitigation and recovery measures.
Member states were encouraged to adopt and domesticate the “SADC Climate Change Strategy and Action Plan” for collective implementation. “The region also associates itself with the outcomes of the “Paris Agreement” adopted in 2015, as a successor to the Kyoto Protocol. It is encouraging that following the adoption, some Member States have proceeded to sign the Paris Agreement,” reads a statement from the summit.
