African economies grew by 3.9% GDP in 2014 amid global and regional shocks

Abidjan Cote D’Ivoire (Capital Markets in Africa) — African economies registered 3.9% average GDP growth in 2014 compared to the 3.7% in 2013. This reflects resilience to global and regional shocks which affected the continent last year, according to the African Development Bank Group’s Annual Report, which was released Wednesday, May 27 in Abidjan.

According to the report, despite the negative impacts of low commodity prices, the Ebola epidemic in West Africa as well as the fundamentalist and military insurrections witnessed in many countries, the continent achieved considerable growth, but with sharp variations between regions and countries.

It further stated highlighted that Africa’s economic growth was higher than the 3.3 percent global average in 2014. Western Asia recorded 2.9 percent, while Latin America and the Caribbean grew by 1.2 percent. Africa, however, grew slower than the emerging markets and developing economies of the world, which registered 4.4 percent growth.

From regional perspectives, East Africa emerged as the best performer with a 7.1 percent average GDP growth. Ethiopia, Rwanda, and Tanzania outstandingly grew at 10.3, 6.1, and 7.1 percent, respectively. West Africa followed with growth averaging 6.0 percent, a commendable performance in the light of conflicts in the region, the Ebola crisis, and the decline in oil prices. Nigeria, which rebased its economy earlier in the year, posted a 6.3 percent growth.

Still on regional comparison, Central Africa recorded an average of 5.6 percent, reflecting considerable resilience to shocks, including military insurrections and the decline in oil prices. Gabon, which grew at 5.1 percent, saw the expansion in non-oil sectors, especially timber processing, making up for the fall in oil prices, while the main drivers of the 8.9 percent growth in the Democratic Republic of  Congo (DRC) were mining, agriculture and infrastructure investment.

North Africa continued to recover from the slump in previous years, recording an average growth of 1.7 percent in 2014, compared with 1.6 percent in 2013. While Algeria witnessed a resurgence of growth to 4 percent, from 2.8 percent in 2013, Morocco recorded 2.7 percent, from 4.7 percent in 2013. At 2.2 percent, Egypt’s growth remained stable. Tunisia’s relatively smooth political transition was an important factor in the country’s modest 2.4 percent growth from 2.3 percent in 2013. Instability in neighbouring Libya (with -19.8 percent growth), however, remains a notable downside risk for Tunisia.

Furthermore, it reported that Southern Africa recorded 2.7 percent growth, from 3.6 percent in 2013 remained sluggish. South Africa, the region’s largest and most influential economy, which had to contend with structural bottlenecks, strained industrial relations, and low investor and consumer confidence, posted a 1.5 percent GDP growth from 2.2 percent in 2013. Growth in other countries in the region was substantially higher. With growth at 7.6 percent, compared with 7.4 percent in 2013, Mozambique continued to be the region’s fastest-growing economy, driven by foreign investment in mineral, gas and oil prospecting. Similarly, Zambia and Malawi posted impressive growth rates of 5.7 percent each, (from 6.7 and 6.1 percent, respectively, in 2013). Namibia’s economy grew at 5.3 percent from 5.1 percent in 2013.

On a final note, the report highlighted that a few countries, such as Ghana, Zambia, and Nigeria, experienced significant macroeconomic imbalances in 2014. In Ghana and Zambia, exchange rates depreciated sharply, stoking a rise in inflation, from 11.7 percent in 2013 to 17.0 percent in 2014 for Ghana, and from 7.0 percent in 2013 to 7.9 percent in 2014 for Zambia. Due to concerns over deteriorations in their fiscal positions, both countries were downgraded by international credit rating agencies.

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