African Growth at 7-Year High, But Not Thanks to Its Major Economies
Growth in Africa’s two largest economies may be sputtering along but that won’t stop the continent’s gross domestic product from expanding at the fastest pace since at least 2012.
GDP growth for the continent is forecast to accelerate to 4 percent this year, up from an estimated 3.5 percent in 2018, making it the fastest-growing region in the world after Asia, according to the African Development Bank. And that’s despite Nigeria and South Africa, which make up almost half of the continent’s GDP, “pulling down Africa’s average growth,” as the Abidjan-based lender said in its latest economic outlook report.
Nigeria’s GDP will expand by 2.3 percent in 2019, which is below the rate of population growth, as the government struggles to reduce the nation’s oil dependence and attract foreign investment. South Africa’s expansion will be even slower, at 1.7 percent, as the continent’s most-industrialized economy battles to recover from last year’s recession. Both countries are in the AfDB’s list of 10 slowest-growing economies.
While the powerhouses in western and southern Africa struggle to gain meaningful momentum, the continent’s economic growth will once again be driven by East Africa, which will be the fastest-expanding region for the fifth straight year. Ethiopia, Kenya, Rwanda and Tanzania all feature on the AfDB’s list of 10 fastest-growing economies for 2019. Egypt, the biggest economy after Nigeria and South Africa, will also help drive growth. Output in the Arab world’s most-populous country will rise around 5.5 percent this year as the government’s structural reforms attract more investment.
Subdued growth in southern Africa is due to South Africa’s weak output, which affects neighboring countries, the AfDB said. While West Africa’s prospects are more upbeat, they may be clouded by risks including uncertainty in global commodity prices and security concerns in some countries, the lender said.
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