Africa’s Economic Growth: It’s Not All Doom and Gloom

LAGOS (Capital Markets in Africa) – Angola unveils $44 billion 2017 budget, sees economic growth of 2.1 percent. Angola, which has been hard hit by depressed oil prices, on Friday unveiled a 2017 budget of 7.3 trillion kwanza ($44.22 billion) with a budget deficit of 5.9 percent of gross domestic product. Aia–Eza Silva, the budget state secretary, told reporters the budget forecasts sub-Saharan Africa’s third-largest economy to grow 2.1 percent next year compared with estimates of 1.3 percent this year, and is based on an average crude oil price in 2017 of $46 a barrel. Angola, which is heavily dependent on crude exports, has had to slash spending and growth forecasts before. In July Luanda halved its 2016 economic growth forecast and slashed government spending as lower oil prices hammered state revenues.

Botswana’s growth seen at 4.4 percent annually for next 6 years. Botswana’s economy will grow by an average of 4.4 percent annually from April 2017 to March 2023, the National Development Plan presented to Parliament showed. Botswana will introduce a new fiscal rule next year that will see its diamond producers save 40 percent of the southern African nation’s annual mineral revenue in a sovereign wealth fund, according to the document.

Congo republic government sees 2017 GDP growth rising to 3.4 percent thanks to several new oil blocks which are expected to come live, government spokesman Thierry Moungalla said in a statement. In addition, Congo Republic plans to cut its budget by 24.3 percent in 2017 to 2.74 trillion CFA francs ($4.7 billion) as it reins in public spending following this year’s presidential election, the government said.

Egypt’s economy is likely to grow 3.5 percent in the 2016/17 fiscal year, missing the government’s target of around 5 percent and falling below last year’s growth rate, a Reuters poll. The poll, which surveyed 17 analysts, found growth would pick up only slightly to reach 3.7 percent the following fiscal year. The economy also fell short of the government’s target of 5.5 percent for the 2015/16 fiscal year, which ended in June. Egypt’s finance minister has estimated growth for that period at around 4.2 percent.

Ghana is revising its forecast for gross domestic product growth in 2017 to 7.0-7.4 percent from a previous forecast of above 8 percent, Finance Minister Seth Terkper said. Government spending remains within targets set by the International Monetary Fund under a three-year programme to stabilize the economy, despite an approaching Dec. 7 presidential election, Terkper told reporters. “Expenditures are within the IMF programme targets …. We are estimating growth between 7.0 and 7.4 percent, which is still robust,” he said, without giving a reason for the cut to forecasts.

Kenya’s 2016 GDP growth seen at 5.9 percent, agriculture aids, World Bank says: Kenya’s economy is expected to grow by 5.9 percent in 2016, the World Bank stated, unchanged from an earlier forecast and up from actual growth of 5.6 percent last year. The bank said growth will be driven by improved performance in the agriculture sector and tourism, and increased foreign direct investments. The World Bank predicted that Kenya’s economy will grow by 6 percent in 2017 – also unchanged from its March update – and 6.1 percent in 2018.

Morocco’s economy grew 1 percent year-on-year in the third quarter of 2016, up from 0.5 percent in the previous three months, due to a severe drought that hit the agricultural sector, the planning agency said. The agency expects Moroccan gross domestic product (GDP) growth to slow to 0.8 percent in the fourth quarter of the year.

Nigeria’s economy is likely to shrink 1.3 percent in 2016, the National Bureau of Statistics executive said, a sharp downward revision of its estimates he said was prompted by sharp falls in the naira after dollar peg was dropped. The NBS had predicted the Nigerian economy to grow 3.8 percent in 2016, but low oil prices have hammered the OPEC member’s government income and the naira, and recession first appeared in the second quarter with 2.1 percent contraction. A contraction in 2016 would mark Nigeria’s first year of recession in 25 years.

Uganda’s economy will grow by 5 percent in the 2016/17 (July-June) fiscal year, the International Monetary Fund forecast stated, trimming the forecast from 5.5 percent after state revenues missed targets and some major projects faced delays. The IMF also predicted Uganda would grow 5.5 percent next fiscal year, boosted by rising spending on infrastructure.

South Africa cut its 2016 GDP growth forecast by almost half and warned Africa’s most developed economy risked slipping into a “low growth trap”. South Africa’s economy is expected to grow by 0.5 percent this year, down from an estimate of 0.9 percent in February, Treasury said in its medium term outlook. Treasury’s growth forecast for 2017 was cut to 1.3 percent from 1.7 percent previously, and its 2018 estimate was trimmed to 2 percent from 2.4 percent. Lower growth estimates were partly due to weak investor confidence linked to perceptions of elevated political risk.

Tunisia has cut its 2016 growth forecast to 1.5 percent this year, down from an expected 2.5 percent, its finance minister said on Wednesday, citing difficulties in the phosphate sector where protests have disrupted production. According to the complementary law for the 2016 budget, growth will be at 1.5 percent this year due to a decline in economic activity in several sectors including phosphate, Finance Minister Lamia Zribi stated.

Zambia’s economy should grow three percent this year, little changed from 2015, while the fiscal deficit will widen after Africa’s second largest copper producer was hit by depressed metal prices, Finance Minister Felix Mutati said. Zambia’s fiscal deficit will top 10 percent of Gross Domestic Product this year, up from 8.1 percent in 2015, after state spending rose due to infrastructure projects, emergency power imports and subsidies, Mutati told parliament. Zambia began talks with the International Monetary Fund in March about a potential aid package after agreeing the budget deficit was not sustainable. The government hopes to conclude a programme with the IMF in the first quarter of next year.

Zimbabwe expects economic growth to quicken to 4.8 percent in 2017 from 1.2 percent this year on improved agriculture production and higher global commodity prices, the Treasury said in a budget strategy document. In a document dated October and marked “pre-budget strategy paper for 2017”, the Treasury said the economy had this year shown resilience in the face of liquidity shortages and the worst drought in a quarter century but would rebound next year. “The 2017 growth projection is anchored on the following assumptions: normal to above normal rainfall pattern, supporting a favourable agricultural season (and) moderate improvement in international commodity prices,” the document said.