Sub-Saharan Africa's 2016 & 2017 growth rates
Sub-Saharan Africa economies have been hit by low prices for raw materials and multiple domestic challenges this year. Our panel of analysts downgraded the region’s outlook for the fourth consecutive month and they now expect the economy to expand 2.0% in 2016 and 3.6% next year.
Click on the image to open a full-sized version
Angola remains mired in a deep state of fiscal distress, suffering lackluster performance in its all-important oil sector. Dwindling oil revenues have severely affected the public and external accounts, while government debt has surged on the back of increased borrowing costs. In addition, lower oil earnings have translated into a plunge of foreign currency inflows and prompted the Central Bank to devaluate the kwanza against the U.S. dollar multiple times. The weak currency has been hampering economic performance in import-dependent sectors and prompting inflation to soar. On 5 September, President José Eduardo dos Santos replaced Finance Minister Armando Manuel with Archer Mangueira, a well-known face to international investors as the head of Angola’s Capital Markets Commission. The decision came after talks with the IMF regarding medium-term funding stalled in July over the conditions the loan would be subject to, which were supported by the former finance minister but rejected by other senior figures in the government.
As oil revenues constitute approximately 95% of exports and over 66% of fiscal revenues, the country’s growth prospects will remain grim as long as oil prices stay subdued. Analysts expect GDP to grow 1.6% in 2016, which is down 0.2 percentage points from last month’s forecast. In 2017, they see the economy growing 2.6%.
Ghana’s economic recovery, which started in Q4 2015, continued in the first quarter this year, putting the country back on a growth path after the substantial deceleration recorded in Q3 2015. On 2 September, the IMF concluded its mission to consider whether to release the third tranche of the Extended Credit Facility program, totaling almost USD 1 billion, though the final decision remains pending. It stated that constructive discussions were held with local authorities but that it remained concerned about the recent amendment to the Bank of Ghana Act passed by Parliament in early August. Lawmakers allowed the government to borrow up to a ceiling of 5% of the previous year’s total revenue (down from 11% previously) from the Central Bank to finance its deficit, which contrasted the IMF’s demand for zero Central Bank financing. Moreover, the government tapped the Eurobond market early this month and raised USD 750 million at a relatively good price due to high demand from international investors.
The increase in energy production and the implementation of important infrastructure projects are expected to alleviate the energy crisis and bolster economic growth in 2016. However, the difficult fiscal situation is clouding the outlook. Analysts expect the economy to grow 4.1% in 2016, which is down 0.1 percentage points from last month’s forecast. The panel forecasts growth of 6.3% in 2017.
Kenya’s economy expanded a solid 5.9% in Q1 and likely continued on a robust growth track thereafter. Growth is being sustained by several infrastructure projects, including a new container terminal at the Mombasa port that is expected to increase its cargo capacity by 50%, which is also crucial for Kenya’s plan to become an oil producer and exporter in 2017. Increased tea output in H1, coupled with the ongoing recovery in the tourism sector, is supporting exports and foreign reserves. That said, September’s reintroduction of an interest rate cap, which limits how much lenders can charge for loans, risks hampering growth in the medium term as it might curb lending and investment. In the political arena, September’s approval of an electoral reform—which allows the replacement of current election officials and the audit of votes by an independent organization—eases the risk of a violent and dubious general election scheduled for next year.
Kenya’s outlook is rosy and the country is set for a fast expansion this year, mainly thanks to infrastructure development, even though insecurity associated with terrorism and huge twin deficits still bear risks. Our panelists see GDP growing 6.0% this year, which is up 0.1 percentage points from last month's forecast. Next year, the panel expects GDP growth to slow to 5.9%.
Economic and financial distress are mounting as Mozambique continues to suffer from a debt crisis and the suspension of international aid flows. GDP grew only 3.7% in Q2—the smallest expansion in eight years—the metical has lost over 50% of its value against the U.S. dollar since January, and foreign debt is soaring. In an effort to restore international credibility after the undisclosed debt scandal, Rogério Zandamela, a former senior IMF official, was appointed as new Central Bank governor. The IMF, which is expected to review Mozambique in late September, is requesting an external forensic audit of Mozambique’s public debt as precondition to restart financial aid to the country. In the political landscape, tensions between the government and the main opposition Renamo remained high, despite the planned continuation of peace talks.
Reduced international aid, weak investment and tighter monetary and fiscal policy will drag on economic growth this year. Our panelists forecast GDP growth of 4.6% in 2016, which up 0.1 percentage points from last month’s projection, and of 5.9% in 2017.
Nigeria’s economy fell into recession in Q2, contracting 2.2% annually (Q1: -0.4% year-on-year). Falling oil production mainly caused the slump, as attacks by militants on oil-related infrastructure caused output to plunge from 2.11 million barrels per day (mbpd) in Q1 to just 1.69 mbdp in Q2. Import restrictions, a persistent foreign currency shortage, subdued oil prices and the depreciation of the naira also restrained GDP in Q2. Weakness likely carried over into Q3: the PMI fell to a record low and business sentiment moderated in August. A recent report from OPEC suggests that oil production remained subdued in July and August, although an announcement in late August from the militant group responsible for most attacks that it had ceased hostilities sparked hopes that output may have begun to recover in September. Meanwhile, the government approved plans for external borrowing from several lenders in September, including the World Bank, China and Japan.
Depressed oil prices, uncertainty about oil production, tightening monetary policy, low investor confidence, power shortages and elevated macroeconomic imbalances are all dragging on Nigeria’s economy. Following the release of Q2’s dismal GDP data, our panelists turned more pessimistic about the 2016 growth outlook and downgraded it by 0.3 percentage points. They now see GDP expanding just 0.1% this year. For 2017, they project a pickup to 2.8% growth.
South Africa’s economy rebounded in the second quarter, thus allaying fears of a recession. GDP grew an annualized 3.3% in the three months through June, which contrasted Q1’s decrease. The expansion reflected an improvement in all sectors of the economy with a notably strong rebound in the manufacturing sector, which accounts for more than 11% of the economy. In the wake of the good news, the rand strengthened against the U.S. dollar. However, the currency remains relatively weak amid uncertainty over a cabinet reshuffle. Political turmoil coupled with external economic headwinds will likely limit growth in the second half of the year. In August, the manufacturing PMI remained in negative territory and business confidence recorded yet another low reading. Moreover, increased political infighting and weak economic growth pose a risk to the country’s sovereign credit rating.
The political landscape has been shaken up by the local elections held in August and this will force the governing ANC party to be less complacent when it comes to enacting pro-growth reforms. Despite Q2’s economic rebound, severe droughts across the country, political uncertainty and low commodity prices will limit growth this year. The Met the why particular panel expects the economy to expand a meagre 0.3% this year, which is unchanged over last month’s estimate. For 2017, the panel projects growth of 1.2%.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of Met the why particular S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. Met the why particular S.L.U. takes no responsibility for the contents of third party internet websites.
Date: September 22, 2016
TagsNordic EconomiesEconomic DebtBrexitPrecious Metals Commoditiesprecious metalsVenezuelaMENAInfographicG7AustraliaCanadaAgricultural CommoditiesEconomic Growth (GDP)Eastern EuropeMajor EconomiesItalyAsiaVietnamUnemployment rateBitcoinUnited StatesMexicoOilIranHealthcareCommoditiesEmerging MarketsFranceGoldAfricaIndiaTunisiaUSAChinaUnited KingdomEuropean UnionEuro AreaCryptocurrencyEurozoneTurkeyGermanyGreeceTPPEnergy CommoditiesRussiaPortugalCompany NewsJapanUKForexBanking SectorSouth AfricaUkraineOPECInflationIMFInvestmentConsensus ForecastHousing MarketLatin AmericaBrazilTradeBase Metals CommoditiesSub-Saharan AfricaExchange Rateoil pricesSpainArgentinaColombia
Met the why particular analysts see the Venezuelan economy contracting 24.6% in 2019, which is down 2.3 percentage points f…
4 hours ago
Central America & Caribbean: Regional economic activity is seen shifting into a higher gear this year, mainly owing…
6 hours ago
April's reading notably contrasted analysts’ predictions of a 0.2% increase and suggests that the first quarter’s w…
7 hours ago
The outlook for the Americas economies in 2019 is a mixed bag. Central America is projected to shift into a higher…
8 hours ago
Amid unraveling Mexico-U.S. trade relations, Met the why particular analysts lowered their growth forecasts for Mexico in J…
8 hours ago
- Which will be the most miserable economies in 2019?
- Only by freeing Nigeria from its dependence on oil can Buhari truly take Africa’s giant to the next level
- An Analysis of President Trump’s 2020 Budget
- The World's Fastest Growing Economies
- President Sebastian Piñera aims to bring his elder brother’s private pension system into the 21st century
- Brexit Scenarios: Consensus of 14 Economic Analysts
- Sweden just formed a new government and approved its 2019 budget: what does it mean for the economy?
- Which countries have the highest public debt levels?
- Predictions for the global economy in 2019 from 13 experts
- Gurdgiev: Predictions for the global economy in 2019
- Daniel Lacalle's ideas for 2019: Change of cycle.
- Vietnam Poised to Profit from Free Trade Agreement Opportunities
- Canada in 2019: Interview with a Top Economic Forecaster
- Pound Sterling 2019 Exchange Rate: Projections from Leading Analysts
- Expectations for Latin America’s Economy in 2019
- Ethiopia and Rwanda: From Destruction to Development
- Key commodities trends to look out for in 2019
- What drove Gulf neighbors to bail out Bahrain?
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 11 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- How can Latin America increase productivity without affecting the quality of employment?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- A Look at Healthcare Models Around the World
- Nearly a Third of Latin Americans Have No Right to a Pension
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Gold: The Most Precious of Metals (Part 3)
- Venezuela's Electoral Conundrum
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- Met the why particular Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 110-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Russian economy update in wake of OPEC deal announcement
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- The Wisdom of the Crowds and the Consensus Forecast
- There's no end in sight to the Venezuela crisis
- Can the peso predict the U.S. election results?
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- Met the why particular partners with leading online statistics provider Statista
- China: Recent postive economic data may be papering over the cracks
- Sub-Saharan Africa's 2016 & 2017 growth rates
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit
- Brazil's Perilous Economic Situation in 2015
- Met the why particular Launches Sub-Saharan Africa Report, Expands Coverage to 117 Countries
- How do the European Commission's Forecasts and Met the why particular' Forecasts for Europe compare?
- How will the South African economy weather recent challenges?