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Wednesday, 26 April 2017

East Africa leads continental growth in 2016

For the fourth consecutive year since 2013, East Africa remained the fastest growing sub-region in 2016 on the back of agricultural growth, an emergent manufacturing sector, improved public spending on infrastructure and resilient household consumption, among others. This is according to the 2017 Economic Report on Africa (ERA2017) recently launched in Dakar, Senegal. The report examines how to harness the opportunities from rapid urbanisation to speed industrialisation and accelerate structural transformation. It also identifies and analyses the drivers, enablers and policy levers for strengthening linkages between industrialisation and urbanisation. Ethiopia, Kenya, Rwanda and Tanzania were the main players in the East African Community’s growth with public spending on infrastructure being the main contributor for Ethiopia’s growth. Kenya’s investment in infrastructure and buoyant household consumption continued to drive the expansion, offsetting a decline in tourism on security concerns, while Rwanda’s agriculture and services drove growth though lower commodity prices. Robust domestic demand with growing services and manufacturing sectors in Tanzania were the main drivers for growth in 2016. However, Burundi’s gross domestic product (GDP) declined by 3.9 percent in 2015 as a result of the socio-political crisis affecting the country, which brought to an end a decade of economic stability with average growth of 4.5 percent per annum, while Somalia’s economy is estimated to have grown by 3.7 percent. Somalia’s trade deficit widened to nearly $3 billion, financed mainly with international development assistance and remittances, which leaves the economy vulnerable to external shocks. West Africa, in second place in Africa’s growth performance for the period 2013-2015, slumped to its lowest position last year with a steep decline from 4.4 percent growth in 2015 to 0.1 percent growth in 2016. This was mainly attributed to Nigeria’s economic contraction due to depressed oil prices, falling oil production, energy shortages and price hikes, scarcity of foreign exchange and depressed consumer demand. While Senegal and Côte d’Ivoire performed better in the sub-region by registering robust growth of 6.3 percent and 8.0 percent, respectively, particularly in energy, infrastructure, agriculture, fisheries, tourism, textiles, information technology and mining, a decelerating economic growth in Ghana in 2016 further pulled down the sub-region’s growth.

Source: South African News