Sub-Saharan African countries continue to grow at a steady pace despite difficult global economic conditions. Growth in the region has remained on track supported by resilient domestic demand, strong commodity prices, and accommodative domestic policies. For newly resource-rich countries, strong governance of new mineral revenues will be key to harnessing resource wealth for sustainable development.
The document provides an analysis of recent global and African economic trends from the World Bank's Office of the Chief Economist for Africa. Key points include:
- Global growth is projected to strengthen to 3% in 2014, led by a recovery in high-income countries. However, risks remain from financial volatility and a slowdown in capital flows.
- Economic growth in Sub-Saharan Africa strengthened to 4.7% in 2013, led by strong domestic demand and investment. Excluding South Africa, growth was 6.1%.
- The outlook for the region remains positive, but is sensitive to risks from lower commodity prices and a slowdown in capital flows. Frontier markets are attracting increasing investment flows
Greetings,
Attached FYI ( NewBase Special 15 February 2016 ) , from Hawk Energy Services Dubai . Daily energy news covering the MENA area and related worldwide energy news. In todays’ issue you will find news about:-
• MENA Region: Non-oil sector revenues to drive 3.8% GDP growth in 2016
• Oman: BP expands scope of $16b Khazzan gas project
• KSA: Expert explains importance of ‘reduce, reuse, recycle’ concept
• Turkey: OMV initiates process to sell OMV Petrol Ofisi
• Egypt:Renewable energy developers edged out in’s Kom Ombo solar project
• UK: A rebranded wind farm subsidy is still a subsidy
• Oil edges down, pares Friday's jump of over 10 percent
• Crude oil rally based on 'false hope': Analyst
we would appreciate your actions to send to all interested parties that you may wish. Also note that if you or your organization wish to include your own article or advert in our circulations, please send it to :-
khdmohd@hotmail.com or khdmohd@hawkenergy.net
Best Regards.
Khaled Al Awadi
Energy Consultant & NewBase Chairman - Senior Chief Editor
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME meme since 1995
Hawk Energy since 2010
ABOUT THIS PUBLICATION
This Overview is based on ESADE’s Economic Report, January 2014, produced by the Department of Economics. This article was written by Prof. Josep M. Comajuncosa. The original document was produced with the support of Banc de
Sabadell.
The document summarizes an investment summit in India focused on the economy, outlook, and capital growth. It provides details on the global and Indian economic outlooks, highlights of the Indian economy, and an overview of the investment summit. The summit aims to accelerate Indian economic growth and identify opportunities and roadblocks. It will include sessions on investment trends, viewpoints from CEOs/CFOs, emerging models, and policies. Speakers will include officials, financial leaders, managers, and academics to discuss the status and projections of core and emerging economy segments.
Singapore and Malaysia are two of the most important economies in South East Asia. Measured by Gross Domestic Product (GDP), Malaysia is the 36th largest economy in the world, whilst Singapore is the 39th largest. But what is the current outlook for the economies and their banking sectors?
The global economy is expected to improve in 2014 with growth forecast at 3.6% after slowing to 2.9% in 2013. Business optimism and expectations for revenue, profits, and investment are up significantly from a year ago, especially in developed economies like the US, UK, and Germany. However, emerging markets face challenges from currency depreciation and slowing growth. While recoveries are taking hold in major economies, unemployment remains high in Europe and demand and skilled labor shortages constrain some business leaders. Overall uncertainties in the global economic outlook remain the top concern for businesses worldwide in 2014.
The global economy is expected to improve in 2014 with growth forecast at 3.6% after slowing to 2.9% in 2013. Business confidence and outlooks have strengthened significantly over the past year across major developed economies. However, emerging markets face challenges including currency depreciation and slowing growth. While recoveries are taking hold in many countries, unemployment remains high in parts of Europe and skills shortages constrain growth in some Asia-Pacific nations. Overall, economic uncertainty remains the top concern for businesses as the global recovery progresses unevenly.
Paper on Emerging Economies by Abhishek PandeAbhishek Pande
1. The document discusses financial reforms in emerging Asian economies. It analyzes policies around fiscal consolidation, sustainable growth, and increased economic cooperation within Asia.
2. Key points include the importance of resolving policy uncertainty in advanced economies to support Asian growth, deeper fiscal and financial integration in Europe, and opportunities for greater trade and financial integration within Asia.
3. The paper recommends setting up financial oversight agencies in emerging Asian nations to coordinate regulation and support sustainable development goals in the region.
The document provides an analysis of recent global and African economic trends from the World Bank's Office of the Chief Economist for Africa. Key points include:
- Global growth is projected to strengthen to 3% in 2014, led by a recovery in high-income countries. However, risks remain from financial volatility and a slowdown in capital flows.
- Economic growth in Sub-Saharan Africa strengthened to 4.7% in 2013, led by strong domestic demand and investment. Excluding South Africa, growth was 6.1%.
- The outlook for the region remains positive, but is sensitive to risks from lower commodity prices and a slowdown in capital flows. Frontier markets are attracting increasing investment flows
Greetings,
Attached FYI ( NewBase Special 15 February 2016 ) , from Hawk Energy Services Dubai . Daily energy news covering the MENA area and related worldwide energy news. In todays’ issue you will find news about:-
• MENA Region: Non-oil sector revenues to drive 3.8% GDP growth in 2016
• Oman: BP expands scope of $16b Khazzan gas project
• KSA: Expert explains importance of ‘reduce, reuse, recycle’ concept
• Turkey: OMV initiates process to sell OMV Petrol Ofisi
• Egypt:Renewable energy developers edged out in’s Kom Ombo solar project
• UK: A rebranded wind farm subsidy is still a subsidy
• Oil edges down, pares Friday's jump of over 10 percent
• Crude oil rally based on 'false hope': Analyst
we would appreciate your actions to send to all interested parties that you may wish. Also note that if you or your organization wish to include your own article or advert in our circulations, please send it to :-
khdmohd@hotmail.com or khdmohd@hawkenergy.net
Best Regards.
Khaled Al Awadi
Energy Consultant & NewBase Chairman - Senior Chief Editor
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME meme since 1995
Hawk Energy since 2010
ABOUT THIS PUBLICATION
This Overview is based on ESADE’s Economic Report, January 2014, produced by the Department of Economics. This article was written by Prof. Josep M. Comajuncosa. The original document was produced with the support of Banc de
Sabadell.
The document summarizes an investment summit in India focused on the economy, outlook, and capital growth. It provides details on the global and Indian economic outlooks, highlights of the Indian economy, and an overview of the investment summit. The summit aims to accelerate Indian economic growth and identify opportunities and roadblocks. It will include sessions on investment trends, viewpoints from CEOs/CFOs, emerging models, and policies. Speakers will include officials, financial leaders, managers, and academics to discuss the status and projections of core and emerging economy segments.
Singapore and Malaysia are two of the most important economies in South East Asia. Measured by Gross Domestic Product (GDP), Malaysia is the 36th largest economy in the world, whilst Singapore is the 39th largest. But what is the current outlook for the economies and their banking sectors?
The global economy is expected to improve in 2014 with growth forecast at 3.6% after slowing to 2.9% in 2013. Business optimism and expectations for revenue, profits, and investment are up significantly from a year ago, especially in developed economies like the US, UK, and Germany. However, emerging markets face challenges from currency depreciation and slowing growth. While recoveries are taking hold in major economies, unemployment remains high in Europe and demand and skilled labor shortages constrain some business leaders. Overall uncertainties in the global economic outlook remain the top concern for businesses worldwide in 2014.
The global economy is expected to improve in 2014 with growth forecast at 3.6% after slowing to 2.9% in 2013. Business confidence and outlooks have strengthened significantly over the past year across major developed economies. However, emerging markets face challenges including currency depreciation and slowing growth. While recoveries are taking hold in many countries, unemployment remains high in parts of Europe and skills shortages constrain growth in some Asia-Pacific nations. Overall, economic uncertainty remains the top concern for businesses as the global recovery progresses unevenly.
Paper on Emerging Economies by Abhishek PandeAbhishek Pande
1. The document discusses financial reforms in emerging Asian economies. It analyzes policies around fiscal consolidation, sustainable growth, and increased economic cooperation within Asia.
2. Key points include the importance of resolving policy uncertainty in advanced economies to support Asian growth, deeper fiscal and financial integration in Europe, and opportunities for greater trade and financial integration within Asia.
3. The paper recommends setting up financial oversight agencies in emerging Asian nations to coordinate regulation and support sustainable development goals in the region.
- Global markets declined and bond yields rose as economic data increased expectations of central banks reducing monetary stimulus. The US market declined the most while European and emerging markets gained.
- In Asia, markets in Hong Kong, South Korea and Australia performed well but India and Singapore declined. Japan's GDP growth slowed.
- European equity markets rose as data pointed to economic expansion returning. UK and German data was also positive.
- US retail sales rose slightly but manufacturing data was weaker, increasing expectations of the Fed tapering bond purchases and causing markets to decline.
The document provides an overview of global economic conditions and labor markets in Q3 2014. It discusses modest projected global growth, varying regional economic performances, and stable to positive labor market outlooks across most regions. Key points covered include ongoing challenges in emerging markets, the strengthening European recovery, steady US job growth and falling unemployment, and stable but slowing growth in China and Japan. The document also summarizes new temporary staffing regulations across several countries.
The document discusses India's strong economic growth in recent years, with GDP growth averaging over 8.5% since 2003 and expected to be around 8.5% in 2007-2008. Inflation has also increased but remains under control at around 5%. Interest rates are expected to rise to control inflation. The strengthening economy has boosted investor confidence but India still faces challenges in sustaining growth, reducing poverty and population growth, and developing infrastructure and education.
The document provides a market update on several African countries including Nigeria, Kenya, Tanzania, Ghana, Uganda, and Rwanda. It discusses key economic, political, and business news/trends in each country over the past month. Some highlights include Nigeria facing headwinds from high inflation and currency weakness, Kenya attracting increasing foreign investment and cementing its position as an East African hub, Tanzania's potential exit from a trade pact testing regional integration, and Ghana emerging as the top foreign direct investment recipient in West Africa but facing a slowing economy.
The global economy is projected to grow at 3.6% in 2014, up from 2.9% growth in 2013. While developed economies like the US, UK, and Germany are expected to grow strongly, some emerging markets face challenges. Business confidence is up globally but lower in BRIC countries. Growth is also expected to be stronger in developing regions than developed economies in 2014, though the gap will be smaller than in past years. Overall the outlook is for continued global recovery but risks remain from the eurozone crisis and tapering of US monetary stimulus.
The document provides an economic outlook and analysis across various sectors in India. It discusses that the RBI kept interest rates unchanged in its recent monetary policy review due to ongoing uncertainties around inflation. While inflation is falling, risks remain from the monsoon season, upcoming general elections, and US Fed tapering. The equity outlook remains positive with expectations of strong corporate earnings growth. Key sectors that are expected to perform well include banking, infrastructure, IT, and pharma. Overall, the analysis maintains a bullish stance on the Indian equity market.
The document provides an overview of global economic conditions and labor market trends for the first quarter of 2014. It discusses the outlook for economic growth in major regions and countries. While growth is projected to improve modestly worldwide in 2014, there is still divergence across markets. The labor market updates indicate unemployment is expected to continue declining in countries like Germany, UK, and US, while other areas still face challenges. Overall salaries are forecast to rise in most countries, with developed markets seeing increases around 3% and emerging markets higher rates. Recent legislative changes in areas like immigration policy are also covered.
The Feb2016 issue of Economy Matters focuses on Union Budget 2016-17. The Global Trends section analyses the prospects of the BRICS economies and oil movement. In the Domestic Trends section, get insights to the Indian GDP, IIP, Inflation, Trade, Economic Survey and Railway Budget.
2014 is expected to be a modestly stronger year for the global economy, with GDP growth projected to surpass 3%. The expansion will be led by a moderate strengthening in North America and the slow but steady recovery in Western Europe. On the other hand, many emerging markets continue to face challenges including structural issues and political turmoil that are limiting growth.
This is the "headline" of the Q2 Global Talent Market Quarterly. Have a look at the new report .
The document summarizes recent economic trends in Japan and the Euro Area. It notes that Japan unexpectedly fell into recession in the third quarter of 2014 due to declines in housing and business investment following a tax hike. The Euro Area also saw GDP growth hover in negative territory in the second and third quarters of 2014 due to weak investment and exports, although this partly reflected temporary factors. Both regions face challenges of high public debt, low potential growth, and structural reforms needed to boost sustainable growth.
Key Growth Drivers and Fiscal Challenges in Economy: India and ChinaDibyajyoti Saikia
This presentation provides a comparison of Indian and Chinese economy in context to Key Growth Drivers and Fiscal Challenges.
Happy reading and Thanks!
- India is facing a major economic slowdown as it is vulnerable to slowing growth in emerging markets.
- Years of populist policies and lack of reforms have led to a large current account deficit, high inflation, and falling currency.
- The stimulus programs after 2008 could only postpone problems, and India now has limited ability to enact new stimulus or use fiscal policy due to constraints.
This document discusses top trends to watch in 2015 in the Asia Pacific real estate market according to a Cushman & Wakefield report. The key points are:
1) Regional economic growth is expected to moderate around 5.0-5.3% as China's growth slows, but domestic demand and policy support will help other economies.
2) Office leasing activity is projected to rebound across many markets in the region due to improving fundamentals, with emerging markets seeing the strongest gains. Vacancy rates may rise in some emerging cities.
3) Non-central business district office locations will continue attracting tenants by offering lower rents and desirable locations compared to prime CBD areas.
This document discusses 10 major challenges confronting the Reserve Bank of India and opportunities for commercial banks to address some of these challenges. The challenges include propelling domestic growth, controlling persistent inflation, mitigating external sector vulnerabilities, and improving various aspects of the financial system. It outlines how inflation impacts household savings and investment. It also discusses opportunities for banks in sectors like MSME, agriculture, housing, and infrastructure to help boost growth. Banks can play a role in curbing food inflation through financing supply chains and providing short-term credit to vendors. Addressing these challenges will require balancing monetary policy objectives of growth and inflation.
The document summarizes recent economic developments and outlook for Indonesia. Key points:
- Tightening global liquidity led to capital outflows from Indonesia, weakening the currency and pushing up inflation in 2013-2014. In response, interest rates were hiked and export restrictions introduced.
- Real GDP growth slowed to 5.1% in 2014, as exports and investment declined. Inflation has slowed to 4.0% in line with tighter monetary policy. The current account deficit widened to 4.3% of GDP due to weak exports and high imports.
- The new government faces challenges of slowing growth amid tight policies. Growth is forecast to further slow in the near term before recovering on reforms and export growth
Asian growth is slowing due to weakening external demand from Europe and sluggish global growth. Second quarter growth indicators were weaker than expected in major economies like China and India due to slowing exports and domestic demand. In response, Asian central banks have stepped up monetary easing to counter external headwinds. The report revises down growth projections for 2012 and 2013 due to weak first half results and delayed global recovery. Risks are tilted downward owing to uncertainties in Europe and potential spillovers through trade and financial channels, although policy support will provide some offset.
Despite a slowing global recovery, growth is projected to be 3.3% in 2014 and 3.8% in 2015. Advanced economies are expected to see faster growth led by the US, while the eurozone recovery remains weak. Emerging markets face more divergence, with steady growth in Asia but slower growth in Latin America, Russia, and the Middle East. Short-term risks include worsening geopolitical tensions and reversals in financial markets.
The document summarizes Nigeria's economic challenges in 2016 and provides an outlook for 2017. Some key points:
- 2016 was a difficult year for Nigeria with negative GDP growth, high inflation, currency depreciation and other issues.
- 2017 may see a slow and uneven recovery if oil prices remain around $55 per barrel, allowing GDP growth of around 1%. High inflation and exchange rate volatility are still risks.
- The recovery path will be treacherous, with scenarios ranging from a fast V-shaped rebound to a continued recession depending on factors like oil prices, the Niger Delta situation, and monetary/fiscal policies.
- Events to watch that could influence the economy in 2017 include oil price
The document discusses the outlook for Asia's economies in 2014, with three main points:
1) Emerging Asian markets are facing increased scrutiny over structural weaknesses, while advanced economies like Japan are seen as more attractive. However, Asia's growth is still outpacing the rest of the world and countries like China will continue growing rapidly.
2) Global investors fled emerging markets in 2013 due to fears over tapering by the US Fed, but many Asian economies' fundamentals remain strong with a growing middle class supporting domestic demand.
3) While countries like China may see slower growth, Asia overall will continue to benefit from trade and demand from other developing economies as well as advanced countries like the US and Japan. Growth in
This document provides an overview and summary of the Asian Development Outlook 2009 report published by the Asian Development Bank. It discusses the effects of the global economic crisis on developing Asia and strategies for rebalancing growth in the region. The crisis has significantly slowed growth in developing Asia through declining global demand and trade. In response, many governments have implemented fiscal stimulus packages, though the specific details and impacts are unclear. The report examines ways to strengthen domestic demand and rebalance growth away from heavy reliance on external trade, including developing social safety nets, improving investment climates, and adjusting exchange rates. Policy mixes need to be tailored to individual country circumstances. Overall, the document highlights the challenges facing Asian countries from the global crisis and the importance of re
The document discusses the weakening global economy as the euro area crisis continues, with no end in sight. While major emerging economies like China and India have also slowed, sub-Saharan Africa has maintained strong growth above 5% and could emerge as the next retail frontier. The region has an estimated $2.2 trillion spending potential by 2020 and a rising youth population, making it an attractive market for retailers. International companies are increasingly investing in sub-Saharan Africa.
- Global markets declined and bond yields rose as economic data increased expectations of central banks reducing monetary stimulus. The US market declined the most while European and emerging markets gained.
- In Asia, markets in Hong Kong, South Korea and Australia performed well but India and Singapore declined. Japan's GDP growth slowed.
- European equity markets rose as data pointed to economic expansion returning. UK and German data was also positive.
- US retail sales rose slightly but manufacturing data was weaker, increasing expectations of the Fed tapering bond purchases and causing markets to decline.
The document provides an overview of global economic conditions and labor markets in Q3 2014. It discusses modest projected global growth, varying regional economic performances, and stable to positive labor market outlooks across most regions. Key points covered include ongoing challenges in emerging markets, the strengthening European recovery, steady US job growth and falling unemployment, and stable but slowing growth in China and Japan. The document also summarizes new temporary staffing regulations across several countries.
The document discusses India's strong economic growth in recent years, with GDP growth averaging over 8.5% since 2003 and expected to be around 8.5% in 2007-2008. Inflation has also increased but remains under control at around 5%. Interest rates are expected to rise to control inflation. The strengthening economy has boosted investor confidence but India still faces challenges in sustaining growth, reducing poverty and population growth, and developing infrastructure and education.
The document provides a market update on several African countries including Nigeria, Kenya, Tanzania, Ghana, Uganda, and Rwanda. It discusses key economic, political, and business news/trends in each country over the past month. Some highlights include Nigeria facing headwinds from high inflation and currency weakness, Kenya attracting increasing foreign investment and cementing its position as an East African hub, Tanzania's potential exit from a trade pact testing regional integration, and Ghana emerging as the top foreign direct investment recipient in West Africa but facing a slowing economy.
The global economy is projected to grow at 3.6% in 2014, up from 2.9% growth in 2013. While developed economies like the US, UK, and Germany are expected to grow strongly, some emerging markets face challenges. Business confidence is up globally but lower in BRIC countries. Growth is also expected to be stronger in developing regions than developed economies in 2014, though the gap will be smaller than in past years. Overall the outlook is for continued global recovery but risks remain from the eurozone crisis and tapering of US monetary stimulus.
The document provides an economic outlook and analysis across various sectors in India. It discusses that the RBI kept interest rates unchanged in its recent monetary policy review due to ongoing uncertainties around inflation. While inflation is falling, risks remain from the monsoon season, upcoming general elections, and US Fed tapering. The equity outlook remains positive with expectations of strong corporate earnings growth. Key sectors that are expected to perform well include banking, infrastructure, IT, and pharma. Overall, the analysis maintains a bullish stance on the Indian equity market.
The document provides an overview of global economic conditions and labor market trends for the first quarter of 2014. It discusses the outlook for economic growth in major regions and countries. While growth is projected to improve modestly worldwide in 2014, there is still divergence across markets. The labor market updates indicate unemployment is expected to continue declining in countries like Germany, UK, and US, while other areas still face challenges. Overall salaries are forecast to rise in most countries, with developed markets seeing increases around 3% and emerging markets higher rates. Recent legislative changes in areas like immigration policy are also covered.
The Feb2016 issue of Economy Matters focuses on Union Budget 2016-17. The Global Trends section analyses the prospects of the BRICS economies and oil movement. In the Domestic Trends section, get insights to the Indian GDP, IIP, Inflation, Trade, Economic Survey and Railway Budget.
2014 is expected to be a modestly stronger year for the global economy, with GDP growth projected to surpass 3%. The expansion will be led by a moderate strengthening in North America and the slow but steady recovery in Western Europe. On the other hand, many emerging markets continue to face challenges including structural issues and political turmoil that are limiting growth.
This is the "headline" of the Q2 Global Talent Market Quarterly. Have a look at the new report .
The document summarizes recent economic trends in Japan and the Euro Area. It notes that Japan unexpectedly fell into recession in the third quarter of 2014 due to declines in housing and business investment following a tax hike. The Euro Area also saw GDP growth hover in negative territory in the second and third quarters of 2014 due to weak investment and exports, although this partly reflected temporary factors. Both regions face challenges of high public debt, low potential growth, and structural reforms needed to boost sustainable growth.
Key Growth Drivers and Fiscal Challenges in Economy: India and ChinaDibyajyoti Saikia
This presentation provides a comparison of Indian and Chinese economy in context to Key Growth Drivers and Fiscal Challenges.
Happy reading and Thanks!
- India is facing a major economic slowdown as it is vulnerable to slowing growth in emerging markets.
- Years of populist policies and lack of reforms have led to a large current account deficit, high inflation, and falling currency.
- The stimulus programs after 2008 could only postpone problems, and India now has limited ability to enact new stimulus or use fiscal policy due to constraints.
This document discusses top trends to watch in 2015 in the Asia Pacific real estate market according to a Cushman & Wakefield report. The key points are:
1) Regional economic growth is expected to moderate around 5.0-5.3% as China's growth slows, but domestic demand and policy support will help other economies.
2) Office leasing activity is projected to rebound across many markets in the region due to improving fundamentals, with emerging markets seeing the strongest gains. Vacancy rates may rise in some emerging cities.
3) Non-central business district office locations will continue attracting tenants by offering lower rents and desirable locations compared to prime CBD areas.
This document discusses 10 major challenges confronting the Reserve Bank of India and opportunities for commercial banks to address some of these challenges. The challenges include propelling domestic growth, controlling persistent inflation, mitigating external sector vulnerabilities, and improving various aspects of the financial system. It outlines how inflation impacts household savings and investment. It also discusses opportunities for banks in sectors like MSME, agriculture, housing, and infrastructure to help boost growth. Banks can play a role in curbing food inflation through financing supply chains and providing short-term credit to vendors. Addressing these challenges will require balancing monetary policy objectives of growth and inflation.
The document summarizes recent economic developments and outlook for Indonesia. Key points:
- Tightening global liquidity led to capital outflows from Indonesia, weakening the currency and pushing up inflation in 2013-2014. In response, interest rates were hiked and export restrictions introduced.
- Real GDP growth slowed to 5.1% in 2014, as exports and investment declined. Inflation has slowed to 4.0% in line with tighter monetary policy. The current account deficit widened to 4.3% of GDP due to weak exports and high imports.
- The new government faces challenges of slowing growth amid tight policies. Growth is forecast to further slow in the near term before recovering on reforms and export growth
Asian growth is slowing due to weakening external demand from Europe and sluggish global growth. Second quarter growth indicators were weaker than expected in major economies like China and India due to slowing exports and domestic demand. In response, Asian central banks have stepped up monetary easing to counter external headwinds. The report revises down growth projections for 2012 and 2013 due to weak first half results and delayed global recovery. Risks are tilted downward owing to uncertainties in Europe and potential spillovers through trade and financial channels, although policy support will provide some offset.
Despite a slowing global recovery, growth is projected to be 3.3% in 2014 and 3.8% in 2015. Advanced economies are expected to see faster growth led by the US, while the eurozone recovery remains weak. Emerging markets face more divergence, with steady growth in Asia but slower growth in Latin America, Russia, and the Middle East. Short-term risks include worsening geopolitical tensions and reversals in financial markets.
The document summarizes Nigeria's economic challenges in 2016 and provides an outlook for 2017. Some key points:
- 2016 was a difficult year for Nigeria with negative GDP growth, high inflation, currency depreciation and other issues.
- 2017 may see a slow and uneven recovery if oil prices remain around $55 per barrel, allowing GDP growth of around 1%. High inflation and exchange rate volatility are still risks.
- The recovery path will be treacherous, with scenarios ranging from a fast V-shaped rebound to a continued recession depending on factors like oil prices, the Niger Delta situation, and monetary/fiscal policies.
- Events to watch that could influence the economy in 2017 include oil price
The document discusses the outlook for Asia's economies in 2014, with three main points:
1) Emerging Asian markets are facing increased scrutiny over structural weaknesses, while advanced economies like Japan are seen as more attractive. However, Asia's growth is still outpacing the rest of the world and countries like China will continue growing rapidly.
2) Global investors fled emerging markets in 2013 due to fears over tapering by the US Fed, but many Asian economies' fundamentals remain strong with a growing middle class supporting domestic demand.
3) While countries like China may see slower growth, Asia overall will continue to benefit from trade and demand from other developing economies as well as advanced countries like the US and Japan. Growth in
This document provides an overview and summary of the Asian Development Outlook 2009 report published by the Asian Development Bank. It discusses the effects of the global economic crisis on developing Asia and strategies for rebalancing growth in the region. The crisis has significantly slowed growth in developing Asia through declining global demand and trade. In response, many governments have implemented fiscal stimulus packages, though the specific details and impacts are unclear. The report examines ways to strengthen domestic demand and rebalance growth away from heavy reliance on external trade, including developing social safety nets, improving investment climates, and adjusting exchange rates. Policy mixes need to be tailored to individual country circumstances. Overall, the document highlights the challenges facing Asian countries from the global crisis and the importance of re
The document discusses the weakening global economy as the euro area crisis continues, with no end in sight. While major emerging economies like China and India have also slowed, sub-Saharan Africa has maintained strong growth above 5% and could emerge as the next retail frontier. The region has an estimated $2.2 trillion spending potential by 2020 and a rising youth population, making it an attractive market for retailers. International companies are increasingly investing in sub-Saharan Africa.
The African continent represents the opportunities of tomorrow, and we at Roland Berger see strong business opportunities being created by Africa's improving economic strength. Mining this unprecedented potential requires sound knowledge and a thorough understanding of the market. That is the purpose of our study titled "Africa – The next growth opportunity". Its main goal is to highlight selected economies with environments conducive to robust economic growth, and at the same time help companies and investors benefit from and contribute to this growth by providing an in-depth analysis of high-potential industries within these economies.
The African continent represents the opportunities of tomorrow, and we at Roland Berger see strong business opportunities being created by Africa's improving economic strength. Mining this unprecedented potential requires sound knowledge and a thorough understanding of the market. That is the purpose of our study titled "Africa – The next growth opportunity". Its main goal is to highlight selected economies with environments conducive to robust economic growth, and at the same time help companies and investors benefit from and contribute to this growth by providing an in-depth analysis of high-potential industries within these economies.
The document provides an overview and analysis of the global economic outlook by the IMF staff. It finds that:
1) Global economic activity has fallen sharply, with advanced economies experiencing their worst declines since World War 2.
2) The IMF forecasts that the global economy will contract by 0.5-1% in 2009 on average before a gradual recovery in 2010.
3) Turning the global economy around depends critically on concerted policy actions to stabilize financial conditions and support demand through fiscal and monetary policies.
Global economies are witnessing two-speed recovery with the US economy showing firm signs of recovery, while growth in Euro Area still languishing in sub-optimal territory. Among the Asian economies, growth in Japan and China too continues to remain tepid. We discuss this in detail in the section on Global Trends in this month’s issue of Economy Matters. In the section on Domestic Trends, we analyze that the economic condition in the present scenario is in greater disarray than it was during the breakout of the global financial crisis of 2008-09, when both government as well as the RBI were quick to respond to the challenges and brought the economy back to recovery path within no time. In Corporate Performance, we examine the sectoral performance in the last fiscal in order to find the sectors which were badly hit in the wake of the current bout of economic crisis. The Sectoral spotlight for this issue is on Agriculture, a traditionally important sector of the Indian economy because of its enormous contribution in being the provider of basic source of livelihood to the most of the population in India. However in the recent past various challenges such as low agricultural yield, declining share of public investment, and lack of technological advancements have plagued the sector. We discuss the sector’s challenges and suggest measures to bolster its output. In the Special Article, we discuss India's deteriorating external position in the last few years, manifesting itself in a steady deterioration in the current account which slipped from a surplus at the start of the last decade to a huge deficit of 4.8 per cent in 2012-13. Bulk of the deterioration in current account is attributable to the sharp rise in merchandise trade deficit over the last decade. Ultimately, for India to contain its current account deficit at a more sustainable level of 2.0-2.5 per cent of GDP, it is essential that we ensure competitiveness of our goods and services, so that our imports are contained and exports boosted.
The document discusses the growing middle class in Africa, which has risen to 34% of the population or nearly 350 million people by 2010. About 60% of Africa's middle class, or 180 million people, have consumption levels barely above poverty. The middle class is a key driver of economic growth and poverty reduction on the continent as their spending fuels domestic demand. The document uses a definition of the middle class as those with daily per capita consumption between $2-20 in 2005 purchasing power parity dollars. It presents evidence on the size and characteristics of Africa's middle class based on research of household surveys in 45 countries.
Unleashing Africa’s Potential as a Pole of Global GrowthDr Lendy Spires
After a long period of stagnation in the 1970s and 1980s, Africa has re-emerged in the twenty-first century as a continent alive with opportunities, driven by such key factors as improved governance, better macroeconomic policies, management and business environment, abundant human and natural resources, urbanization and the rise of the middle class, and good economic performance and market potential.
These factors are underpinned by steadily improving socio-economic indicators and concrete efforts to bridge gender gaps and promote equality, both of which are essential prerequisites for sustainable economic growth and development. Indeed, Africa, historically a slow-growth continent has now become one of the fastest growing regions in the world, achieving an average growth rate of above 5 per cent per year during 2000-2008. Across the continent, fundamental changes are taking place. The economic, social and political environment is improving and African countries are now expected to become a source of global economic growth.
Meanwhile, the global economy continues to struggle to recover from the recent economic and financial crises and generate jobs to address problems of high unemployment. Efforts to spur recovery and generate jobs have been derailed by macroeconomic imbalances that have persisted, driven by high levels of borrowing and sovereign debt in developed economies and high savings in emerging and developing economies, with ineffective global policy coordination and mechanisms to address these imbalances playing a contributory role.
Africa has the potential to be part of the solution both to the problem of low global growth and high unemployment, and to that of global imbalances. The continent’s current growth momentum and dynamism and the state of the global economy make the time right for Africa to utilize its huge untapped resources and growth potential to become a driver of global growth and rebalancing.
However, in order to unleash its potential and become a pole of global growth and a source of global rebalancing, the continent needs to effectively address a number of challenges and binding constraints. Addressing these constraints will require urgent and determined action in many areas, but, as a matter of priority, areas for concerted action should include strengthening governance institutions; reforming agriculture; accelerating technology acquisition and investing in innovation; investing in human and physical capital; promoting exports and accelerating regional integration; addressing gender inequality and the threat of climate change; and mobilizing the required resources.
This issues paper identifies important issues and questions for consideration by African ministers, central bank governors and high-level experts, regarding how Africa can be part of the solution to the problem of global recession and imbalances.
The document provides an economic and financial market outlook for December 2010. It makes the following key points:
1) The global economy has regained balance as growth fears subside. Emerging economies continue to drive growth, while advanced economies are recovering.
2) The US economy is gaining speed and the likelihood of a double-dip recession is now remote. Growth is expected to accelerate to 3.3% in 2011 and 3.6% in 2012 supported by business and consumer spending.
3) European sovereign debt issues pose ongoing risks but overall European growth is expected to continue, albeit at moderate levels of 1.7-1.9% through 2012.
Kganya Kgare discusses African growth expectation on Standpoint.STANLIB
The IMF has revised sub-Saharan Africa's GDP growth downward to 1.4% for 2016 and 2.9% for 2017, well below the 2004-2013 average of 5.9%. Commodity exporters like Angola, Ghana, and Nigeria are expected to grow at 0% or less due to lower commodity prices. However, growth in East Africa is still holding up, with Kenya and Tanzania expected to improve. While lower commodity prices benefit East Africa as net commodity importers, the region remains vulnerable to weather events and high twin deficits in Kenya.
This document provides an economic overview and outlook for sub-Saharan Africa in three parts:
1) Economic growth has slowed in 2015-2016 due to falling commodity prices, though growth remains higher than other regions. There are large disparities between commodity exporters and importers.
2) New challenges to growth include lower commodity prices, deteriorating global financial conditions, and long-term challenges of climate change and rapid population growth.
3) Growth prospects are examined for select oil exporters, frontier economies, and individual countries like Cote d'Ivoire and Ghana, which are expected to continue robust growth despite challenges.
The document provides an overview and analysis of investment opportunities in Africa. It ranks the top ten most attractive investment destinations for 2016 and compares them to the 2015 rankings. South Africa remains number one, though its lead may weaken due to economic challenges. Egypt and Morocco follow as highly ranked destinations. Cote d'Ivoire re-enters the top ten, displacing Tunisia. The analysis examines trends over the past decade and notes countries that have improved or declined in their rankings and investment scores. Overall, the report finds that investment opportunities remain plentiful across Africa despite macroeconomic headwinds.
This document discusses economic opportunities in developing regions around the world amid an uncertain global economy. It analyzes the state of key economies like the US, Europe, China, and several emerging markets in Africa, Asia, and Latin America. Several countries and regions are highlighted as having strong growth potential in the coming years, such as Africa due to its young population, various Asian countries benefiting from rising domestic consumption, and Latin America's growing middle class driving consumer demand. Challenges and risks to growth are also noted.
How dynamic is your economy?
The Global Dynamism Index (GDI) is a project conducted in collaboration with the EIU, which ranks 50 economies on 22 indicators of dynamism across five categories: business operating environment, economics & growth, science & technology, labour & human capital and financing environment.
Grant Thornton - Global Dynamism Index 2012: business growth fundamentalsGrant Thornton
The document analyzes the Grant Thornton Global Dynamism Index (GDI) 2012, which measures the dynamism of business environments in 50 economies. The index evaluates economies based on 5 categories: business operating environment, science and technology, labor and human capital, economics and growth, and financing environment. According to the GDI 2012, Singapore ranks as the most dynamic economy overall. Finland, Sweden, Israel, and Austria round out the top 5. The index finds that mature economies like Finland and Sweden have strong business operating environments despite economic challenges, while emerging markets still have room for improvement in this area.
DESA News is an insider's look at the United Nations in the area of economic and social development policy. The newsletter is produced by the Communications and Information Management Service of the United Nations Department of Economic and Social Affairs in collaboration with DESA Divisions. DESA News is issued every month.
For more information: http://www.un.org/en/development/desa/newsletter/desanews/index.html
- The passage summarizes Pakistan's economic growth and challenges over recent years. It notes that GDP growth has been stuck at around 3-4% annually, below Pakistan's potential of 6.5%, due to various domestic and external shocks. These include floods, a security crisis, energy shortages, and global economic issues.
- The economy showed modest signs of recovery in 2011-12, with estimated GDP growth of 3.7% compared to 3% the previous year. Agriculture grew 3.1% and manufacturing 1.8% while services grew 4%.
- However, growth remains below potential and structural issues remain like challenges to sustaining high growth, low inflation, and balanced external payments. Re
The document discusses Asia-Pacific's role as the driving force for global economic growth following the recent crisis. It notes that while recovery has been slow in North America and Europe, Asia-Pacific economies have experienced strong growth and many companies in the region are doing well. It attributes Asia-Pacific's resilience to lessons learned from the 1997 Asian Financial Crisis, which prompted governments to strengthen fiscal management, build large foreign exchange reserves, and improve financial regulation. As a result, the region entered the global crisis on stronger footing than Western economies. Going forward, Asia-Pacific's continued growth will depend on managing risks like inflation and maintaining regional economic integration.
Where Is The Global Economy Heading, According to QNB Group?QNB Group
The document summarizes QNB Group's outlook on the global economy. It finds that advanced economies like the US and Eurozone will see stagnant or weak growth in 2013-2014. Emerging markets will also slow due to capital outflows from anticipated US tapering. However, QNB believes a few areas will be bright spots and help drive global growth - China is expected to grow around 8% annually, sub-Saharan Africa over 6.5-7%, and GCC countries around 4.5-5% led by Qatar at 6.5-6.8%. Overall the global economic horizon is clouded but these regions may help offset weakness in other areas.
The document provides an overview of recent developments in emerging East Asian local currency bond markets. It notes that while growth prospects remain robust in emerging East Asia, uncertainties in the eurozone pose risks. Total bonds outstanding in the region grew 7.0% in 4Q11, led by strong corporate bond growth, while government bond growth was more modest. Inflationary pressures have moderated but may rise again with higher commodity prices.
The chairman welcomed attendees to the 8th edition of the Nigeria Alternative Energy Expo (NAEE), which brings together policymakers, researchers, investors, exhibitors, and consumers to discuss issues related to green growth and renewable energy in Nigeria. Previous NAEE events raised concerns about climate change, energy infrastructure deficiencies, importation of substandard renewable products, and lack of local skills and capacity in the renewable energy sector. However, the chairman commended recent government policies and initiatives supporting renewable energy and the green growth agenda, such as the Renewable Energy and Energy Efficiency Policy and ratification of the Paris Agreement. He also praised genuine private sector investors who have supported the sector without government assistance. The chairman urged the government to support these
1) The document discusses waste management in Nigeria and opportunities to generate wealth from waste. It notes that waste is increasing due to population growth, urbanization, and economic development.
2) Solid waste management practices and challenges in Nigeria are described, including a lack of sewage treatment and mixing of human waste with solid waste. Integrated solid waste management and various processing techniques like composting and recycling are recommended.
3) Success stories of cleaner production technologies in Nigeria are provided, like organo-mineral fertilizer plants and plastic recycling facilities. Recommendations include learning from other countries' recycling rates and implementing sustainable waste management practices.
Climate Smart Nigeria advocates for alternative energy and climate change awareness in Nigeria. The document discusses the challenges of climate change and Nigeria's reliance on fossil fuels. It outlines Climate Smart Nigeria's programs to promote renewable energy education and adoption. These include training institutes, community centers, school initiatives, and ambassador networks. The organization aims to address climate change impacts, energy access issues, and transition Nigeria to a more sustainable economy.
ISNAD-Africa is a network that aims to build human capacity in Africa for sustainable energy, environmental sustainability, and climate resilience. It launched a mentoring program that matched over 300 African researchers with mentors from over 30 countries. The program received over 17,000 views from 120 countries in its first 3 weeks. ISNAD-Africa seeks collaborations to further support training, research, and outreach on clean energy and climate issues in Africa.
The document discusses how adopting blockchain technology could help finance alternative energy access in Africa. It notes that over 1 billion people globally lack electricity, most in sub-Saharan Africa. Blockchain could decentralize renewable energy financing by enabling crowdfunding of projects, increasing investor transparency and confidence, and growing peer-to-peer energy markets. However, challenges include knowledge gaps, a lack of blockchain developers focused on energy, unclear regulations, and few proven use cases outside cryptocurrencies. Adopting blockchain early could help renewable companies gain a competitive advantage.
60-70% of communities in northern Nigeria lack access to energy. Providing affordable off-grid energy solutions that meet basic needs like lighting and cooking as well as enable productive uses at households and rural businesses is a major challenge. PIND's approach focuses on developing energy solutions that are locally sourced, technologically appropriate, adaptable to common designs, and easily produced and scaled. The goal is cost-effective, sustainable solutions that empower local communities and spur economic development while improving social welfare.
Bridging the relationship gap between solar manufacturers, technicians, and dealers to ensure quality distribution of solar energy products. There is currently poor regulation and support for solar contractors who control 70% of the market. The Solatrify platform aims to connect verified solar contractors with vetted solar product manufacturers and suppliers to provide wholesale pricing, customer leads, financing, and business support in order to grow the sustainable solar energy sector in sub-Saharan Africa.
The document provides information about the Nigeria Alternative Energy Expo (NAEE) which is Nigeria's largest sustainable energy event. Some key details:
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Why access to modern Energy is a necessary condition for Human Development?
MATIKE NGONG ROLLIN
Chairman of Global actions for local development Organizations,
SUSTAINABLE DEVELOPMENT –
CLIMATE CHANGES AND NEW
TECHNOLOGIES
THE DUTY TO NURSE OUR PLANET IN
SUSTAINABLE DEVELOPMENT –
CLIMATE CHANGES AND NEW
TECHNOLOGIES
THE DUTY TO NURSE OUR PLANET IN
SUSTAINABLE DEVELOPMENT –
CLIMATE CHANGES AND NEW
TECHNOLOGIES
THE DUTY TO NURSE OUR PLANET IN
Georges ILUNGA KAPONSOLA
Promoting Massive Renewable Energy (RE) Projects
towards achieving Sustainable Development in Nigeria
Taiwo Benjamin
Carleton University, Canada
Presented at #naee2015
1. The study investigated producing bioethanol from neem tree leaves through enzymatic hydrolysis and fermentation.
2. Dried and powdered neem leaves were hydrolyzed using varying amounts of Bacillus suspension to break down the leaves into simple sugars. The hydrolyzed leaves were then fermented using Bacillus firmus to produce bioethanol.
3. The highest bioethanol yield of 1.85% was obtained using 1.5cm3 of Bacillus suspension for hydrolysis. FTIR analysis confirmed the presence of alcohol in the bioethanol samples.
This document summarizes the constraints facing Nigeria's renewable energy sector and potential solutions. The key constraints identified are limited access to markets, finance, supportive policy/regulation, technical capacity, and awareness. Nigeria's electricity consumption and unmet demand are high while access to markets is constrained by a lack of incentives, high upfront costs, and low awareness. Overcoming these barriers will require coordinated efforts from developers, government, and other stakeholders to improve access to finance, develop standards and incentives, boost technical skills, and increase public awareness of renewable energy benefits. Cooperation across all sectors is needed to strengthen Nigeria's renewable energy market.
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KEYNOTE ADDRESS BY THE PRESIDENT AND COMMANDER IN CHIEF OF THE ARMED FORCES, FEDERAL REPUBLIC OF NIGERIA, PRESIDENT MUHAMMADU BUHARI, GCFR, REPRESENTED BY PERMANENT SECRETARY, FEDERAL MINISTRY OF POWER, AMB GODKNOWS IGALI, OON, FNAH, AT THE OPENING CEREMONY OF THE 5TH NIGERIA ALTERNATIVE ENERGY EXPO (NAEE 2015) 14TH - 16TH OCTOBER, 2015 AT SHEHU MUSA YAR'ADUA CENTRE, ABUJA
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NATIONAL RENEWABLE ENERGY AND ENERGY
EFFICIENCY POLICY (NREEEP)
FOR THE ELECTRICITY SECTOR
Energy supply in Nigeria can be classified into two main categories, (a) urban and (b) rural.
Urban areas are essentially on the grid while rural areas are largely off the grid. Improved
energy supply to urban residents is being addressed mainly by the Roadmap for Power
Sector Reforms, which was launched by President Goodluck Ebele Jonathan, GCFR, in
August 2012. The roadmap essentially focuses on the development of grid-based
electricity. However, the on-going power sector reforms will only enable the extension of
the national grid to large rural areas which are close to main urban areas.
Rural areas that are remote and have a low demand density will have to depend on off-grid
energy solutions as the economies of on-grid deployment do not favour rural
electrification. Off-grid areas will have to depend on alternative solutions. The implication
of this strategy for improved energy supply across Nigeria will entail the utilization of
renewable energy sources at our disposal, both on-grid and off-grid. Consequently, it is
essential that a coordinated, coherent and comprehensive renewable energy policy (REP)
be put in place to drive hydropower, biomass, solar and wind as energy sources. In this
respect, like existing sources of electricity, renewable energy can become a source of
energy that may be traded and procured by the power industry as they would procure
fossil or non-renewable energy sources. It is intended that the renewable energy policy
advanced in this document will serve as a blue print for the sustainable development,
supply and utilization of renewable energy resources within the economy for both on-grid
and off-grid energy solutions.
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Cleades Robinson, a respected leader in Philadelphia's police force, is known for his diplomatic and tactful approach, fostering a strong community rapport.
1. OCTOBER 2012 | VOLUME 6
An analysis of issues shaping Africa’s economic future
Sub-Saharan African
countries continue to
grow at a steady pace
The region's decade-long
economic expansion
appears sustainable
For newly resource-rich
countries, strong
governance will be key to
harnessing resource
wealth for development
AFRICA’S PULSE TEAM:
Punam Chuhan-Pole (Team Leader)
Manka Angwafo
Mapi Buitano
Allen Dennis
Vijdan Korman
Aly Sanoh
With contributions from
Shanta Devarajan and Wolfgang Fengler
This document was produced by
the Office of the Chief Economist
for the Africa region
2. Summary
Global economic activity has slowed significantly in recent months, weighed down by policy uncertainty.
Despite difficult global conditions, growth in Sub-Saharan Africa has remained largely on track. However, the
region’s economic prospects are vulnerable to heightened downside risks.
Because Africa’s growth recovery since 2000—the longest expansion since independence—was based on
improved macroeconomic policies and political stability, the prospects of sustained growth are strong.
Discoveries of minerals are bringing the prospect of large revenues for newly resource-rich countries. The
challenge for these countries will be to strengthen mineral governance so as to avoid the pitfalls of resource
wealth.
Section 1: Recent Trends and Prospects
High-income country growth remains under pressure, although financial market conditions have eased.
African countries continued to post steady growth, supported by resilient domestic demand, strong
commodity prices, and an accommodative policy environment.
RECENT TRENDS IN THE GLOBAL ECONOMY
Economic activity slowed in the second quarter, amid difficult global conditions. An escalation of financial market tensions in
Europe in May and weaker growth in some of the larger developing countries significantly impacted global economic activity
as weaker consumer and business confidence translated to higher precautionary savings and weaker spending. Reflecting this
weakness, global industrial production contracted for the first time since May 2009. The deepest contraction occurred in the
Eurozone, the epicenter of the current crisis. Among developing countries, the expansion in industrial output still remains well
below its ten-year average of 7.5 percent (3m/3m, seasonally adjusted annualized rate).
The slowdown in real-side activity has led to a slump in global trade. Global trade flows contracted at a pace of 4.5 percent
(3m/3m, saar) between May and July. The sharpest contraction in import demand was in the Euro Area (-15.3 percent in July),
where unemployment rates continue to hit record highs. Developing country trade has also fallen. Weak import demand
from developing countries reflects not only spillovers from the Euro Area crisis, but also ongoing slowdown in the domestic
economies of some large developing countries including Argentina, Brazil, China, and India.
Conditions in global financial markets have eased significantly since July, supported by recent policy decisions of major
central banks. Among these are, the European Central Bank’s announcement to “do whatever it takes to save the euro” and
the upholding of the European Stability Mechanism by the German Constitutional court; as well as policy interventions such
as the unlimited bond buying programs announced by the ECB (Outright Monetary Transactions), the US Federal Reserve’s
QE3 program and the Bank of Japan’s expanded Asset Purchase Program. Borrowing costs have come down—for example,
developing country bond spreads have eased by some 80 basis points to go below their long term average of 310 bps.
Indeed, gross capital flows to developing countries, which fell by about 30 and 40 percent in May-June, have since recovered
to their April levels. The recent monetary policy stimulus has also supported a pick-up in precious mineral prices. But financial
markets remain vulnerable to changing market perceptions and implementation of policies.
2 > A F R I C A’ S P U L S E
3. Though activity is likely to pick-up by the fourth quarter, global GDP is expected to grow at a relatively weak pace of 2.3
percent in 2012, with high-income countries expanding at 1.2 percent and developing countries at 5.1 percent. Baseline
projections call for a slow strengthening of global activity, but prospects for 2013 are fragile, particularly in high-income
economies. Global growth is projected to rise to 2.6 percent in 2013, with growth in high-income and developing countries
edging up to 1.5 percent and 5.6 percent respectively. Financial markets, though improved, are still nervous and sentiment
is vulnerable to bad news. Should conditions in Europe deteriorate markedly, the global economy could return to recession-
like conditions. However, given recent policy interventions, this is most likely a tail event. Outside the Euro Area, risk of the
so-called fiscal cliff in the United States also threatens to derail an already fragile global economy. Under current legislation this
would impose a sharp 5 percent drag to US GDP in 2013, with negative implications for developing regions with strong trade
and investment ties to the United States. The indirect impacts through weaker confidence and implications on global financial
and commodity markets could be even more significant.
RECENT DEVELOPMENTS IN
SUB-SAHARAN AFRICA
Despite setbacks in the global economy, growth in
FIGURE 1: Percent growth in GDP
Sub-Saharan Africa has remained largely on track.
in % ch Sub-Saharan
An accommodative policy environment, still strong
8 Africa continues
commodity prices, and domestic demand have continued to see relatively
6
to support economic activity. Relatively resilient domestic robust growth
demand and robust export growth in countries with 4
new mineral discoveries in recent years are expected to 2
underpin economic growth for the remainder of the year.
0
The region is projected to grow by 4.8 percent in 2012,
-2
broadly unchanged from the 4.9 percent growth rate of 2005 2006 2007 2008 2009 2010 2011 2012
2011 (Figure 1). Excluding South Africa, the region’s largest Sub Saharan Africa Sub Saharan Africa Developing
(ex. South Africa) (ex. China and India)
economy, growth is forecast at 6 percent, making it one
of the fastest growing developing regions. Indeed, a third
of countries in the region will be growing at or above 6 FIGURE 2: Fast growing Sub-Saharan African
economies in 2012
percent. A number of the fastest growing economies in
Sierra Leone 25% A third of the
the region are buoyed by new mineral exports—iron ore Niger continent will
Angola
in Sierra Leone and uranium and oil in Niger—a return to be growing at
China
or above 6%,
peace—Cote D’Ivoire—and robust growth in the non- Rwanda
Ghana buoyed by new
minerals sector—Ethiopia (Figure 2). Ethiopia mineral exports,
Congo, Dem. Rep. a return to
Cote d'Ivoire
Sub-Saharan African trade has been impacted by peace, or
Zambia
robust growth
developments in the global economy. The region’s Mozambique
India in the
exports rebounded nicely in the first quarter of the year, Brazil non-minerals
growing at an annualized pace of 32 percent, up from 0 5 10 15 20 sector
the -11 percent pace recorded in the last quarter of 2011 Source: Development Prospects Group, World Bank.
Note: Projected GDP growth.
(Figure 3). However, exports have not been immune from
A F R I C A’ S P U L S E > 3
4. the recent bout of market volatility stemming from the Euro Area crisis, as well as the economic slowdown that is occurring
in some of the largest developing economies, in particular China, which remains an important market for the region’s metal
and mineral exporters. Although more recent data
FIGURE 3: Growth in exports (value), seasonally is lagging across countries in the region, where data
adjusted annualized rate (3m/3m)
is available there is evidence of the slowdown. For
Recent 140
Sub-Saharan 120 instance, in South Africa, the most globally integrated
export 100
economy in the region, export growth on a seasonally
performance 80
60 adjusted annualized basis was down by around 32
has tracked
40
developments percent in the three months leading to June. Similarly,
20
in the global 0 export growth in both Kenya and Botswana contracted
economy -20 at -2 percent and -20 percent respectively in June.
-40
-60
2011M01 2011M04 2011M07 2011M10 2012M01 2012M04
Trends in services trade, particularly tourism (an
Sub-Saharan Africa Agriculture Industrial raw materials Oil important driver of growth in countries such as Kenya,
Source: World Bank and Datastream.
Mauritius, and Seychelles), have mirrored developments
in the global economy. According to the UN World
Tourism Organization, tourism arrivals to the region were up some 7 percent in the first four months of 2012. The continued
growth of tourist arrivals to destinations in the region has benefitted from the ongoing diversification of source countries. In
Kenya tourist arrivals (via air travel) increased by 8.8 percent (y/y) in the two months ending in June compared with the same
period last year. In Mauritius, visitors from Europe, which accounts for two-thirds of arrivals, dropped 6 percent in the first six
months 2012, but this was partly offset by an increase of 16.7 percent in visitors from Asia (visitors from China increased some
59 percent). The pace of expansion of tourism arrivals in the second half of 2012 is likely to be constrained by weak global
conditions, as well as increased piracy and terrorism threats on and off the East Coast of Africa.
Investments to the region have been weakened by the global slowdown. After reaching an estimated $42.4 billion in 2011,
private capital flows to the region are expected to fall to $36.6 billion in 2012 (Figure 4). However, given the still relatively high
levels of commodity prices and the ongoing resource prospecting and exploration in the region (particularly in East and West
Africa), foreign direct investment flows to the region
FIGURE 4: Private capital flows (US billions) in 2012 are expected to remain resilient, steadying at
to Sub-Saharan Africa
around $31 billion (compared to $32.5 billion in 2011).
Foreign direct 50
investment 45 Other private capital flows, which are of a shorter term
flows remain 40 duration and, thereby, more susceptible to changing
more resilient 35
market sentiments, are estimated to be lower by some
than other 30
external private 25 $4.2 billion (i.e. from $11.7 billion in 2011 to $7.5 billion
credit flows 20 in 2012). For instance, a recent survey showed that as a
15
result of the ongoing deleveraging in the Euro Area some
10
5 75 percent of external banks that conducted business
0 in the region decreased available credit or liquidity (e.g.
2008 2009 2010 2011 2012
trade finance) and became more selective with customers
Foreign Direct Investment Net Private Credit (Bonds, Bank lending)
in the region.
Source: Development Prospects Group.
4 > A F R I C A’ S P U L S E
5. As financial market conditions have improved, investor interest in the region has strengthened. Indeed, in September Zambia
joined the growing list of African countries (Ghana, Senegal, Nigeria, Namibia) that for the first time in recent years are tapping
international capital markets. Zambia’s maiden 10-year $750 million Eurobond was oversubscribed and was issued at a 5.625
percent yield, lower than yields in some high-spread Euro Area economies. Further, South Africa’s maiden inclusion in the Citi
World Government Bond Index (WGBI) is supporting an increase in foreign investor participation in South Africa’s domestic
bond market, thereby, helping to fund its increasing current account deficit and keep a lid on inflation.
Consumer spending most likely held up during the recent escalation of financial market tensions. Data on consumer
sentiment and retail spending across countries is largely unavailable, but in South Africa and Nigeria, where retail sales data
is available, we observe that on a quarter-on-quarter basis, retail trade volumes were up by some 8.6 percent in both South
Africa and Nigeria, for the three months ending in June. Using monthly passenger car import data as a proxy for the strength
of consumer durable goods, we observe that on a year-on-year basis the growth in the dollar value of imports of durable
consumer goods held steady at 18 precent in the three months ending in May (when the Euro Area crisis escalated), similar
to that recorded in the previous month. Nonetheless the performance across the region was varied with import demand
of durables expanding across some 80 percent of countries and contracting in the remaining countries. Where consumer
durables contracted, this was more likely due to domestic challenges rather than from spillovers related to the Euro Area
situation: Malawi where the sharp devaluation of the Kwacha significantly increased import costs; Sudan which was impacted
by South Sudan’s decision to put on hold the production and exports of oil; and Central African Republic where conflict
continues to disrupt economic activity.
Consumer spending in aggregate appears to have at least held steady through May for most countries and in June for the two
largest economies in the region. This is all the more important as consumer spending accounts for some 60 percent of GDP in
Sub-Saharan Africa. In part, the resilience of consumer spending was supported by wage increases, improved access to credit,
steady remittance flows (projected to reach $24 billion in 2012 from $22 billion in 2011), and falling inflation and interest rates
in a number countries (Kenya, Uganda, South Africa). Inflation has trended down as food and fuel price pressures have eased,
providing scope for flexibility in monetary policy.
Government spending is supportive of growth. Helped by relatively moderate debt-to-GDP ratios averaging some 40 percent
in the region, government spending has been expansionary in recent years. Indeed, real government consumption is expected
to rise by an average of 4.8 percent in 2012, consistent with the estimated real GDP growth in the region, showing that both
government and private sector spending (consumption and investment) will remain important drivers of GDP growth in the
region. Nonetheless, rising fiscal deficits in some countries could compromise future growth prospects due to the risk of macro
instability. To the extent that government spending is instrumental in relieving binding constraints in infrastructure provision
as well as human capital sectors, the ongoing stimulatory fiscal policy will be supportive not only of the current growth
trajectory but also the long-run competitiveness and productive capacities in these economies. However, a continuation of
generally accommodative policies since the 2008-09 global crisis means that in many countries fiscal policy space to counter
severe external shocks may be constrained. Some countries such as Botswana and Nigeria are moving to rebuild fiscal policy
space.
A F R I C A’ S P U L S E > 5
6. MEDIUM-TERM OUTLOOK FOR SUB-SAHARAN AFRICA
Looking forward, recent policy interventions in high-income countries will likely contribute to stabilizing the situation in
Q4 2012 and bolster global demand in 2013. Domestic demand in the region should continue to remain relatively resilient
compared to support from external demand. As a result growth in Sub-Saharan Africa is expected to see an uptick to 5.2
percent in 2013. Excluding South Africa, growth is expected to reach 6.2 percent in 2013.
With demand from both high-income and developing countries expected to come in weaker than previously thought, the
demand for Sub-Saharan African exports of goods and services will be weaker in the remainder of 2012 and in 2013, although
a pick up is expected thereafter. Nonetheless, for some of the countries for which new mineral discoveries have been made in
recent years export growth is still expected to remain robust (Mozambique and Sierra Leone).
Although commodity prices have tapered off somewhat in recent months, compared to their earlier highs, they still remain
elevated and are thus expected to support economic activity in the resource-rich sector. Domestic demand, which has
remained a resilient pillar of growth in Sub-Saharan Africa in recent years, is expected to continue in that trajectory over the
medium term. The strength in domestic demand will be supported by ongoing investments to improve productive capacity,
particularly in tackling infrastructural barriers (which has benefitted from new sources of capital), rising incomes, favorable
demographic dynamics, higher remittance flows (rising to $27 billion by 2014), lower interest rates in some countries (for
example, South Africa and Kenya) and the rise in foreign direct investment. Indeed, foreign direct investment to the region,
supported by a growing middle-income and still high commodity prices is projected to pick up steadily to a record high of
over $48 billion by 2014.
Nonetheless, risks to these forecasts remain tilted on the downside, as the global economy remains fragile, and weaker growth
in China could further curtail growth in the resource-dependent economies in the region.
A fragile global recovery presents a key risk. While the slow strengthening of global activity in the baseline remains the most
likely scenario, prospects are fragile particularly in high-income economies. A sharp deterioration in these countries could
have severe global implications. Indeed, GDP in Sub-Saharan Africa could fall by up to 3.5 percentage points relative to
baseline were there to be a marked escalation of financial market tensions that shut off some larger Euro Area economies from
refinancing their debt. However, given recent policy interventions, this is most likely a tail event. A credit squeeze in some of
the periphery Euro Area economies could pull GDP growth down by 0.8 percentage points. Risk of the so-called fiscal cliff in
the United States also threatens to derail an already fragile global economy. Though other developing regions with stronger
trade and investment ties to the United States will likely be harder hit (e.g., East Asia and Latin America and the Caribbean),
the effects on Sub-Saharan Africa will not be insignificant, with an estimated direct impact of a reduction of 0.3 percentage
points from the baseline forecast. The indirect impacts through weaker confidence and implications on global financial and
commodity markets could be even more significant.
Trade and investment flows will be the main channels through which weaker global economy will impact the region. Trade
impacts of a weaker global economy are likely to be most severe for regional exporters of oil, other minerals, and agro-
industrial raw materials (e.g. cotton) as sales (prices and volumes) of these commodities tend to more sensitive to the global
business cycle. Food exporters will be less hard hit because food tends to remain stable even as global activity rises or recedes.
Smaller economies like Swaziland, Seychelles Cape-Verde, and Gambia would be exposed to a sharp decline in global tourism.
6 > A F R I C A’ S P U L S E
7. Tighter financial conditions in the wake of a Euro Area crisis or rattled market confidence from a fiscal cliff situation in the
US would likely affect short-term capital flows to the more financially integrated economies like South Africa, and to a lesser
extent Nigeria and Kenya. If the crisis endures then FDI inflows, upon which much of the region relies, are also likely to be
impacted.
Developments in commodity prices remain a source of concern as well. Should China not succeed in engineering the soft-
landing scenario of the baseline, demand for and prices of major metals and minerals could decline significantly. Over the
past decade, Sub-Saharan African exports to China
have increased from 5 percent to some 19.3 percent FIGURE 5: Exports to China as a share of total exports
in % Sub-Saharan
in 2010, with oil (Sudan, Angola, Republic of Congo) 80
Africa's exports
and metal and mineral exporters (Zambia, Mauritania, 70
to China have
Democratic Republic of Congo) among the countries 60 increased in the
50 last decade.
whose exports are heavily dependent on Chinese
40 Developments
demand (Figure 5). Another commodity price risk is on in the Chinese
30
the supply-side shocks to oil (triggered by a possible economy could
20 impact exports
escalation in geopolitical tensions), which could lead to 10 of minerals
a surge in oil prices. This development would likely hit 0
Sudan
Zambia
Angola
Mauritania
Congo, Dem. Rep.
Congo, Rep.
Gambia, The
Rwanda
Tanzania
Burkina Faso
Central African
Zimbabwe
Sub-Saharan Africa
Mali
Ethiopia
Namibia
South Africa
Gabon
Madagascar
Cameroon
Benin
Mozambique
hard the oil importers in the region, putting pressure
on their currencies and potentially reversing the lower
inflationary trends observed in 2012; although for oil
exporters the price shock would be to their benefit. 2010 2000-2002 Average
Source: Development Prospects Group, World Bank.
While external risks are most prominent, a number of domestic challenges could also cause outturns to sour. Disruptions to
productive activity from political unrest are important potential downside risks, as investment, merchandise trade and tourism
receipts, all important growth drivers, are likely to suffer. The 6 percent contraction in output in Cote d’Ivoire in 2011 was due
to the civil unrest there, and in 2012 there has been new political unrest in Mali.
Another downside risk stems from adverse weather conditions. With the agricultural sector accounting for about 20 percent
to 40 percent of GDP in most Sub-Sahara African countries (and an even higher share of employment), and with much of the
sector dependent on good rains, the impact of poor rainfall on GDP growth in the region can be significant. However, the
effects of poor rainfall are not limited to the agricultural sectors. They also have implications for the services and industrial
sector, as these sectors depend on the generation of power from hydroelectric sources. Already in 2012, poor rains are forecast
for the eastern Horn of Africa as well as the Sahelian zone, affecting parts of Mauritania, Mali and Niger.
FOOD INSECURITY
The recent spikes in international food and grain prices (Figure 6) could have negative implications for Sub-Saharan Africa. An
unprecedented hot and dry summer in the United States, Russia and Eastern Europe led to reduced yields on both maize and
wheat production worldwide. As a result, the World Bank Food Price Index soared by 10 percent in July compared to a month
earlier. Over the same period, prices of maize increased by almost 25 percent (Figure 7) and wheat prices surged by around 30
percent.
A F R I C A’ S P U L S E > 7
8. While it is still unclear what the implications of these
FIGURE 6: World Bank Food Price Index
spikes could be for the region, the high proportion of
The spike in 280 expenditures on food, high rates of malnutrition and
prices could 260
the recurrent crisis and insecurity—particularly in the
have negative
240
implications for Sahel region—are enough reason for increased concern
220
the region given and monitoring. A recent report by the FAO and USAID’s
the high 200
Famine Early Warning System Network (FEWSNET), lists14
proportion of 180
expenditures on countries which are particularly vulnerable to the recent
160
food, high rates food price increase. In most of these countries, maize
140
of malnutrition
and wheat provide 20 percent or more of the average
and recurrent 120
2010M07 2010M12 2011M05 2011M10 2012M03 2012M08
food insecurity household’s caloric intake (Table 1).
Food Grains Fats & Oils Other food
Additionally, the presence of Desert Locusts and ongoing
FIGURE 7: World prices of select commodities
conflict in the Sahel region of West Africa further
The world price 360 undermines the region’s food security. Countries like Mali
of maize and
340 and Niger are already suffering from infestation from
wheat rose
sharply by 24 320 these locusts and there is potential for the swarm to move
and 29 percent 300 to neighboring countries such as Mauritania and Chad,
respectively in
the month of
280 further amplifying food scarcity in a region already food
July 260 insecure from population displacement due to conflict
240 (see April issue of the Pulse).
220
200 The impact of this latest food price increase in local
2011M08 2011M10 2011M12 2012M02 2012M04 2012M06 2012M08
markets across Africa is difficult to determine as current
Wheat, US SRW($/mt) Maize ($/mt)
Source: Development Prospects Group, World Bank.
trends show significant variation in domestic prices across
the region. In West and Central Africa, prices of cereals are
still at record high levels owing to low production in 2011.
TABLE 1 Countries on FAO watch list % caloric intake from both However, better rains in 2012 have caused prices in the
for food insecurity wheat & maize
Fourteen Lesotho 69 coastal countries to decline. Wheat prices in Mauritania
countries are Malawi 52 rose by 12 percent in July, reflecting the sharp increase in
particularly Zimbabwe 51 global prices that month. Further, the price of domestic
vulnerable to Kenya 39
recent food and imported rice rose by about 50 and 40 percent above
Ethiopia 35
price spikes. Mauritania 32 prices of a year ago, respectively.
In many, maize Mozambique 29
and wheat
Eritrea 28
provide 20% or Prices in East Africa, though high, have started to ease on
Congo 20 (wheat only)
more of the account of the new cereal harvest reaching markets. In
Senegal 20
average
Sudan 15 Sudan, prices of sorghum and millet declined in August
household’s
Mali 15 but are still twice as high as a year ago as trade flows
caloric intake
Niger 14
were interrupted by conflict and demand from neighbors
South Sudan No information on consumption
increased. Similarly, in neighboring South Sudan, cereal
Source: Food and Agriculture Organization, FEWSNET.
prices declined by 10-15 percent due to increased imports
8 > A F R I C A’ S P U L S E
9. from Ethiopia and Uganda. Still, prices remain between 30 and 80 percent higher than last year. Kenya continues to show
modest decline in all monitored food staples, while price changes for the month of August in Ethiopia and Uganda have been
mixed. In Ethiopia, teff prices are more than 50 percent above a year ago and in Uganda both banana and cassava (national
staples) remained between 29 and 17 percent above last year’s prices, respectively.
Prices in Southern Africa are in line with seasonal trends. However, in Zimbabwe, the price of maize is 48 and 68 percent higher
in the cities of Harare and Bulawayo, respectively. Maize prices in Malawi are on the rise due to poor harvests and a high rate of
inflation.
IS AFRICA’S ECONOMIC RECOVERY SUSTAINABLE?
Since 2000, Africa has seen more than a decade of economic growth, the longest expansion in over 50 years. During this
period, two very different development experiences have unfolded in tandem.
Two competing narratives describe the economies of Sub-Saharan Africa over the last fifteen years. On the one hand, GDP
growth has been relatively rapid, averaging 5 percent a year until the 2008-9 global economic crisis; since 2010, growth has
resumed and is expected to increase to over 5 percent in 2013. Moreover, growth was widespread: 22 non-oil countries
averaged 4 percent growth or higher for the decade 1998-2008. Africa has been attracting private capital flows which, now
exceed foreign aid. The poverty rate has been falling faster than one percentage point a year and for the first time, between 2005
and 2008, the absolute number of people living on $1.25 a day fell (by 9 million). Child mortality has also been declining, and
even though a large number of African countries are unlikely to meet the MDGs, about half the “off-track” countries are within 11
percent of the trajectory to reach the goals.
On the other hand, Africa’s growth has largely followed commodity prices, and African exports are highly concentrated in primary
commodities. Manufacturing’s share of GDP is the same as in the 1970s. With the exception of Mauritius, no African country has
achieved structural transformation. Despite overall poverty reduction, some rapidly growing countries such as Burkina Faso,
Mozambique and Tanzania have reduced poverty only slightly. The absolute levels of human development are the lowest in the
world. Indicators of service delivery are appalling: teachers in public primary schools in Tanzania are absent 23 percent of the
time; public doctors in Senegal spend a total of 29 minutes a day seeing patients. Such systems are unlikely to be able to deliver
at the scale required by Africa’s population boom. Finally, Africa’s civil wars may have ended, but political instability is widespread:
this year alone saw coups d’état in Guinea-Bissau and Mali, violence on the border between South Sudan and Sudan, as well as in
eastern Congo. And on any worldwide indicator of corruption, Africa scores the lowest.
How can these seemingly contradictory narratives be reconciled? Devarajan and Fengler (2012) contend that the growth
success is mainly due to reforms in economic policies, necessitated by misguided policies of the past. Meanwhile, the
development challenges—lack of structural transformation, weak human capital and poor governance—reflect government
failures that are difficult to overcome because they are deeply political.
In the half century since independence, the African continent experienced highly uneven economic and social performance.
Starting from a similar position to most Asian economies—and in many cases even better—Africa experienced three distinct
growth episodes (Figure 8): Post independence sluggish growth (1960-1975), Two lost decades (1976-1999) and the “catch up”
(since 2000).
A F R I C A’ S P U L S E > 9
10. The initial poverty reduction strategy for Africa post independence seemed simple. Experts believed that Africa just needed
transfers of financial resources to close its development gap. Investments in roads, schools and clinics did not materialize into
higher standards of living and growth.
FIGURE 8: Africa's GDP growth (1961 - 2011) Moreover with the discovery of natural
Africa’s three 10 resources—particularly oil—across
growth Slugish growth The lost decades The catch-up
8 the continent, Africa’s exports were
episodes:
mixed, bad, 6
highly dependent on commodities.
better The combination of high and volatile
4
commodity prices and low levels of
2
human development and infrastructure,
0
a lack of competitiveness and weak
-2 mobilization of revenues resulted in Africa’s
-4 debt crisis beginning in the late 1970s.
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
What followed were two decades of social
World Sub-Saharan Africa
and economic decline.
Source: Devarajan and Fengler (2012), "Is Africa's Recent Economic Growth Sustainable?"
By the early 1990s, it became clear that Africa’s economic model was not sustainable. Development partners found that
aid-financed projects were not productive in a setting where economic policies were distorted. This led to a new era of
development thinking, characterized by “Structural Adjustment Programs (SAPs)”. The problems with the adjustment programs
were not in substance but in process. African governments often had little incentive to fully implement SAPs as it would have
hurt their own political interests and because these policies were imposed from outside, they could be more easily rejected.
Since the late 1990s, Africa has been catching up. Despite the global financial crisis of 2008/09 Africa has grown at 4.7 percent
between 2000 and 2009. Excluding South Africa, which still represents a third of Africa’s economy and experienced sluggish
growth of 2.1 percent, the continent’s average growth rate was 6 percent. This robust growth performance has resulted in the
first overall reversal in the poverty rate since the 1970s from 58 percent in 1999 to 47.5 percent in 2008. Growth and poverty
reduction was almost universal across types of countries and sub-regions: commodity exporters have been growing as did
commodity importers, landlocked and coastal countries.
More than a decade of strong growth has propelled part of Africa to what the World Bank classifies as “middle income”, or
$1,000 per capita income. Out of Africa’s 48 countries, there are already 21 states with 400 million people which have officially
achieved Middle Income status (even though half of them are still below US$ 2000) (Figure 9). Ten countries representing
another 200 million people today would reach MIC-status by 2025 if current growth trends continue or with some modest
growth and stabilization (Comoros, Zimbabwe). Another seven countries (70 million people) could reach MIC-status if they
accelerate their economic performance and achieved seven percent of uninterrupted growth (Sierra Leone needs to grow
even faster which is possible with the recent expansion in mining). Only ten African countries (230 million people) almost
certainly will not reach Middle Income by 2025. Most of them are fragile and conflict affected states.
A conjuncture of four interrelated factors explain Africa’s “growth recovery” since 2000, which has become the most sustained
expansion since independence and which was not significantly interrupted by the global financial crisis: policy, demography,
geography, and technology. However, policy performance remains uneven across countries and policy areas. Demographic
1 0 > A F R I C A’ S P U L S E
11. pressures, urbanization and technological change
also bring a number of new challenges which African FIGURE 9: Africa’s ride to middle income
Twenty-one
governments will need to address to sustain the current Tunisia
Morocco African
growth momentum. Algeria Libya countries are
Egypt
Western Sahara
already at
middle income,
The improvement in economic fortunes has been Mauritania
866 Mali
668 Niger
374 Sudan and 10 more
associated with better policies. Over the last decade Africa
Senegal Chad 1235 Eritrea
1119 823 482
Gambia Bukina Faso Djibouti
would reach
625 Guinea 600 1200
has improved its economic and social policies. These MIC-status by
502 Benin
802 Nigeria Somalia
Sierra Leone Togo 1452
374 Cote d’Ivoire Ethiopia
584 South Sudan 374
Liberia 1195 Ghana 2025 at current
reforms occurred mostly because of two main shifts in 281 1570 Central African Republic
Cameroon 483
1271
Equatorial Guinea growth rates
the region: the lessons learned from the painful debt crisis 27478
Congo
Sao Tome and Principe Gabon 3563
1400 11114 Rwanda
Uganda
487 Kenya
808
582
Democratic Republic
and subsequent HIPC/PRSPs-process which provided debt of the Congo Burundi
231 271
Tanzania
529
relief and supported home-grown reform agendas and Seychelles
11712
Comoros
809
Angola
the end of the cold war that opened up political space in
Malawi
5245 371
Zambia
1425
Mozambique
Africa. Even though it did not yet achieve a transformation Zimbabwe
776
535
Madagascar
467
Botswana
in governance, the opening provided voice to many
Namibia 8680
5293
Swaziland
segments of society which had been marginalized. South Africa
Lesotho
3725
1105
8070
Together with rapid population growth and urbanization,
the demands for better social and economic policies have GDP Per Capita, 2011
MIC Status
been growing. Already MIC
Likely MIC by 2025
Possibly MIC by 2025
Unlikely MIC by 2025
Africa’s economic fortunes also improved at a time when North Africa 0 412.5 825
Kilometers
1,650 2,470 3,300
the possibility of a demographic dividend started to Source: Devarajan and Fengler (2012), "Is Africa's Recent Economic Growth Sustainable?"
emerge. Across the world, demographic dividends are
associated with better development results. Since independence, Africa’s population grew rapidly from a very low base of
below 250 million to 900 million people today. Africa is adding 27 million new people every year and will continue to grow at
this speed until 2050. Fertility is expected to come down gradually which will be compensated by people living longer and a
larger number of young families (which have fewer children). As a result the most rapidly growing group in Africa are “working
adults” (age 16-64) growing by 19 million each year; children (age 0-14) will only continue to grow by 4 million annually. The
dependency ratio will keep improving for the next
decades and reach a relationship of two working adults FIGURE 10: Population projections
per dependent by 2050 (Figure 10).
2,500 Africa could
benefit from a
With rapid population growth Africa is also urbanizing 2,000 demographic
rapidly, with deep implications for social and economic dividend, thanks
1,500 to rapid
opportunities. No country has ever reached high income
population
with low urbanization. Today, 41 percent of Africans 1,000 growth
live in cities, with an additional one percent every two
500
years. By 2033, Africa – like the rest of the world – will
be a majority urban continent. Urbanization and 0
1950 1975 2000 2025 2050
development go together. With a large urban consumer
Total population Working ages 15-64 Youth 0-14 Older 65+
base, firms and customers benefit from scale economies.
Source: World Bank and Datastream.
A F R I C A’ S P U L S E >11
12. The mobile revolution is the most visible sign of Africa’s emergence. In 2000, Africans were hardly connected. South Africa
and a few wealthy individuals had phone connections, and there were no affordable cell phones. Within a decade cell phones
have become ubiquitous with the exception of a few countries.
However, as earlier stated, Africa faces some deep development challenges—in growth, poverty reduction, structural
transformation, human development and governance—that at best call into question the gains of the last fifteen years and at
worst could undermine them.
Slow-growing countries. A significant number of African countries have been growing much more slowly than the regional
average. One group is the so-called “fragile states”, countries where conflict or governance has deteriorated so much that
the state is unable to perform its basic functions. Of the 33 fragile states in the world, 20 are in Africa. If we take out the
oil-exporting countries (whose growth is essentially a function of world oil prices), the remaining African fragile states have
experienced much slower per-capita growth than their non-fragile counterparts. That fragile states grow more slowly is
not surprising, inasmuch as these countries suffer from political violence, insecurity and high levels of corruption. Perhaps
more surprising is the persistence of fragility: A combination of these features of fragile states coupled with a minimum
level of consumption for poor people results in the possibility that the economy gets “stuck” in a low-level equilibrium trap
(Andriamihaja et al., 2012).
Fast growth, slow poverty reduction. Even among Africa’s fast-growing countries, a disturbing number are not seeing rapid
poverty reduction. For example, despite years of significant oil revenues, the central African countries have some of the lowest
human development indicators in the world. The tragedy is that these countries have not been able to use their oil revenues
to significantly improve the welfare of their poor citizens. Perhaps the reason is that oil revenues (unlike tax revenues) go
directly from oil companies to the government, without passing through the hands of the citizens (see section II).
Slow structural transformation. Even among countries that have achieved both rapid growth and poverty reduction—
Ghana, Rwanda, and Ethiopia are examples—there has been remarkably little structural transformation. The share of
manufacturing in GDP or employment is still quite low, and scarcely higher than it was before the growth phase. Yet labor-
intensive manufacturing growth is probably the best way for Africa to absorb the 7-10 million young people entering the
labor force each year.
Infrastructure. There are many reasons why competitive manufacturing has not taken off in Africa, but most of them revolve
around the high costs of production on the continent. A major factor behind these high costs is Africa’s infrastructure deficit.
For example, African exporters face some of the highest transport costs in the world, especially in trying to ship goods from
landlocked countries to the ports. But a study by Raballand and Teravaninthorn (2010) shows that vehicle operating costs
along the four main transport corridors are no higher than in France. Yet, transport prices are among the highest in the world.
The difference between transport prices and vehicle operating costs are the profits accruing to trucking companies, some of
which are of the order of 100 percent.
Business climate. In addition to infrastructure, a host of other factors serve to drive up the cost of doing business in Africa.
The World Bank’s Doing Business indicators rank African countries lowest among all regions of the world. While there has been
progress recently—last year, 36 out of 46 African countries reformed business regulations, and Rwanda and Sao Tome and
1 2 > A F R I C A’ S P U L S E
13. Principe are among the world’s leading reformers—the fact remains that the costs of starting and running a business in Africa
are, on average, the highest in the world.
Informal sector. Most Africans work in smallholder farms and household enterprises, what is often called the informal sector.
In fact, for those low-income countries where there are data, the private wage employment sector has been creating jobs at
a faster rate than GDP has been growing. But that growth is from such a low base that it does not come close to absorbing
the 7-10 million of new entrants into the labor force every year. Instead, most young people will end up working where their
parents do, in smallholder farms and household enterprises.
Weak human capital. As mentioned earlier, despite a decade and a half of economic growth, some poverty reduction and
improvement in human capital indicators, Africa still has the lowest levels of human capital in the world. The weak human
capital base is distressing because considerable resources—from donors and African taxpayers—have gone into the health
and education sectors. At least three factors contribute to this ineffective public spending and weak link between access and
quality. First, resources allocated to addressing the problems of poor people do not always reach the front-line service provider.
Secondly, even when resources get to the school or clinic, the provider is often not there. Teacher absenteeism rates in Uganda
and Tanzania were about 27 and 23 percent, respectively (World Bank, Bold and Svensson). Third, even when present, the
quality of the service is exceedingly poor.
Government failure. All of the problems described so far—from slow growth to poverty-insensitive growth to infrastructure
deficits to restrictive business regulations to poor service delivery—have at their root a government failure that is standing in
the way of pro-poor reforms. Whether it is the fact that losers are concentrated while winners are diffuse, or that clientelistic
politics alter incentives facing politicians, the system is in an equilibrium that has no intrinsic force for change.
In light of these deep government failures, are Africa’s recent economic growth and poverty reduction sustainable?
While nothing is certain in this world, two factors provide support for cautious optimism. First, the success of prudent
macroeconomic policies in delivering a long period of growth has generated political support for these and other reforms.
This clearly demonstrates that consensus is possible around overcoming government failures in other important policy areas.
Second, the combination of democratization, demographic change, rapid urbanization, increasing levels of education and
the almost complete connectedness of the continent through the cell phone have substantially altered Africa’s policymaking
processes. Today, there are many more reformers inside and outside government in African societies. At the same time,
there is more political space to voice alternative views and challenge government policies. Greater debate and consultation
make it easier to develop a domestic consensus around reforms. In addition, the telecommunications revolution is enabling
poor people to know what is going on and is greatly lowering the costs of mobilizing collective action, thereby, making
governments more careful about perpetuating anti-poor policies.
Despite this cautious optimism about Africa’s overall prospects, there is one group of countries where the challenge of
sustained, pro-poor growth is particularly large: Africa’s mineral exporters.
A F R I C A’ S P U L S E >13
14. Section II: Mineral Governance
Minerals are a major source of income in Africa’s resource-rich countries: Economic rents from oil and mining average
around 28 percent of GDP; and natural resources make up over 77 percent of total export earnings and 42 percent of
government revenues.
Recent mineral discoveries in several countries hold the prospect of large resource rents for these countries as well.
The challenge for the newly resource-rich countries will be to harness natural resource wealth for growth and
development and improve on the performance of traditional mineral exporters.
Strong mineral governance—quality of public institutions, checks and balances on politicians and powerful interest
groups, effectiveness of the state in providing public goods, and the regulatory environment for economic activity—
will be key to avoiding the pitfalls of resource wealth and fostering economic growth.
HOW RESOURCE DEPENDENT ARE AFRICAN ECONOMIES?
SIZE OF THE NATURAL RESOURCE SECTOR
The economic size of the extractive sector—oil, gas and mining—is large in many African countries, and this sector is a
major source of income in these countries. Its economic importance also means that the sector is central to the economic
development of these countries. Economic rents from
FIGURE 11: Resource rents (billions of dollars), 2010 minerals (oil, gas and mining) in Sub-Saharan Africa were
over $169 billion in 2010, out of a world total of $2.43
In 2010, the two 70
trillion.¹ In the two largest oil producers, Nigeria and
largest oil
60
producers: Angola, the combined size of these rents was over $100
Nigeria & 50
Level of Rents (Billion US$)
billion, and in four other countries rents were over $5
Angola, had a
combined total
40 billion a piece (Figure 11).
rent of over 30
$100 bn—almost
20 Resource rents are large in comparison to the size of the
60% of total
rents from the economy. In 2010, 18 countries had mineral rents larger
10
region that year than 5 percent of GDP (Figure 12).² These countries
0
are benefiting from high prices for their resources, new
Nigeria
Angola
South Africa
Sudan
Congo, Rep.
Equat. Guinea
Gabon
Zambia
Chad
Ghana
Congo, DR
Mauritania
Cameroon
Cote d’Ivoire
Mali
Tanzania
Guinea
Botswana
Mozambique
investment and new discoveries. Natural resource rents
in the extractive sector average around 28 percent of
Source: WDI 2012.
Note: Includes oil, natural gas, and other minerals (excludes diamonds and timber). GDP. Rents are higher in resource-rich oil countries: 34
percent of GDP compared to 21 percent of GDP in non-oil
resource-rich countries. Oil-rich Republic of Congo has the highest size of rent relative to GDP (62 percent), and Mauritania
leads the resource-rich mineral countries with 54 percent of GDP. Of course, there is much variation in the size of these rents
across the region: for example six countries have rents that are less than 10 percent of GDP, four countries have rents between
10 to 20 percent of GDP, and the remaining eight countries have rents greater than 20 percent of GDP.
1 Resource rent is the difference between revenue and cost of extraction.
2 For purposes of this analysis, Angola, Cameroon, Chad, Republic of Congo, Cote d’Ivoire, Equatorial Guinea, Gabon, Nigeria, and Sudan (pre-independence of
South Sudan) are classified as resource-rich oil countries and Botswana, Democratic Republic of Congo, Ghana, Guinea, Mali, Mauritania, Mozambique, Namibia,
and Zambia are classified as resource-rich non-oil countries.
1 4 > A F R I C A’ S P U L S E
15. FIGURE 12: Resource rents (% of GDP), 2010
In Sub-Saharan
Africa, rents are
higher in
resource-rich oil
countries: 34%
of GDP
compared to
21% of GDP in
non-oil
resource-rich
countries
<7 8-20 21-40 41-65 <10 11-20 21-30 31-60
3
Oil and natural gas rents 2010 (% of GDP) Other minerals rents 2010 (% of GDP) Sources: WDI 2012
The oil-rich economiestend to be less diversified and,
FIGURE 13: Value added by economic activity for
therefore, more dependent on the extractive sector selected countries 2010 (% GDP)
100 Oil-exporting
than other mineral-rich countries. For example, mining 90
80 countries have
value added accounted for an average of 42 percent of
70 less diversified
GDP in oil-rich countries and only 16 percent in non-oil 60 economies
50
mineral-rich countries in 2010. There are, nonetheless, 40
some variations within oil-rich countries, with Equatorial 30
20
Guinea having the highest dependency at 92 percent 10
0
and Cameroon one of the lowest at 11 percent of GDP
Equat. Guinea
Congo, Rep.
Gabon
Angola
Chad
Botswana
Nigeria
Guinea
Mauritania
Congo, DR
Sudan
Namibia
Cameroon
Mali
Zambia
Mozambique
Cote d’Ivoire
Tanzania
Uganda
Kenya
Ghana
Sierra Leone
Liberia
Swaziland
Rwanda
Somalia
Guine-Bissau
(Figure 13).
The dependence of government revenues and export Other Activities Agriculture Manufacturing Mining and Quarrying
earnings on natural resources is likewise large in Source: UNCTAD 2012.
resource-abundant countries, and has been increasing.
Government revenues from natural resources—a combination of tax and non-tax payments, including royalties and profit
sharing—accounted, on average, for 45 percent of total general government revenues in resource-rich countries in 2011
(Figure 14). The average for oil-rich countries was much higher at 60 percent of total general government revenue. At 77
percent of total merchandise exports (2011), the contribution of natural resources to export earnings is likewise very high
(Figure 15).
The economic importance of natural resources is likely to persist in the near and medium term in several established oil and
mineral producers, thanks to the sizeable stock of resource wealth and the prospects of continued, high commodity prices.
According to Paul Collier⁴ (2012), current African resource reserves may be underestimated given the fact that less investment
3 Other minerals excludes oil and gas but includes bauxite, copper, iron ore, gold, lead, nickel, phosphate, silver, thin, and Zinc. Diamond resource is not included
and therefore Botswana, Namibia, and Sierra Leone are underestimated.
4 “Managing natural resources to ensure prosperity in Africa.” Speech at UONGOZI Institute in Dar es Salam Tanzania in February 28, 2012. Africa has currently
$23,000 per square km worth of subsoil assets compared to Europe’s $125,000.
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