Southern Africa makes strides in fight against poverty President Mnangagwa flanked by Vice Presidents Constantino Chiwenga (left) and Kembo Mohadi during the commissioning of the Kariba hydro power plant last week. Future growth in the region will be bolstered primarily by expectations of increased investment in non-oil sectors such as electricity, construction, technology, large infrastructure projects and mining
President Mnangagwa flanked by Vice Presidents Constantino Chiwenga (left) and Kembo Mohadi during the commissioning of the Kariba hydro power plant last week. Future growth in the region will be bolstered primarily by expectations of increased investment in non-oil sectors such as electricity, construction, technology, large infrastructure projects and mining

President Mnangagwa flanked by Vice Presidents Constantino Chiwenga (left) and Kembo Mohadi during the commissioning of the Kariba hydro power plant last week. Future growth in the region will be bolstered primarily by expectations of increased investment in non-oil sectors such as electricity, construction, technology, large infrastructure projects and mining

Prosper Ndlovu, Business Editor
SOUTHERN Africa has achieved notable strides in the fight against poverty with the accelerated industrialisation policies resulting in improvements in the quality of life for ordinary people within the bloc, according to the African Development Bank (AfDB).

The quest for industrialisation is at the heart of the Sadc economic integration and development agenda.

Despite the persistent challenges afflicting the region’s economies, evidenced by contrasting growth patterns among member states, the AfDB estimates that Sadc’s real Gross Domestic Product (GDP), the main measure of economic growth, could jump by about 2 percent in 2018 and 2.4 percent in 2019.

This is an upward review from the estimated 1.6 percent growth on average in 2017.

“The Southern Africa region has made considerable progress in the fight against poverty and improvements in the quality of life of its inhabitants, through the implementation of policies targeting the acceleration of industrialisation and the promotion of growth and job creation,” AfDB deputy director general for Southern Africa, Josephine Ngure, said.

Despite the improvement, economic performance remains subdued as the region’s economic outlook continues to face major headwinds such as high unemployment, weak commodity prices, fiscal strain, increasing debt, and high inflation, said the bank.

In this regard, the AfDB’s latest report asserts that economic forecasts remain cautious, especially given the very different growth patterns of the region’s economies, particularly sluggish growth in South Africa, the region’s top economy.

“The economic ‘locomotive’ of the region, South Africa, shows signs of slow growth, and possibly declining growth, while low-income countries and the economies in transition, such as Madagascar and Mozambique, recorded more important growth.

“High fiscal deficits and rising public debt pose challenges to macro-economic stability in several Southern African countries,” said Ngure. The AfDB has since advised governments to put in place measures to improve the mobilisation of domestic resources and funds from the private sector.

This will ensure adequate levels of development spending stimulate growth and create jobs, especially for young people, said Stefan Muller, AfDB’s senior economist for Southern Africa.

According to the 2018 Southern Africa Economic Outlook Report, future growth in the region will be bolstered primarily by expectations of increased investment in non-oil sectors such as electricity, construction, technology, large infrastructure projects, mining as well as anticipated continued recovery of commodity prices.

The report indicates that net commodity exporters and low-income economies, generally, are outperforming their larger net manufacturing exporter counterparts. The decline in commodity prices in recent years, reaching their lowest point in 2015, translated into significant income losses for these economies, implying negative impacts on public and private sector spending, and therefore growth and employment, said the report.

Elsewhere in the continent the AfDB said the outlook generally shows contrasting growth trajectories in five regional economies. North Africa is expected consolidate positive growth – reaching 5percent and 4.6 percent respectively in 2018 and 2019. Overall growth in this region is fuelled by high value-added sectors such as electronics and mechanics, as well as private and public consumption.

The AfDB report indicates that East Africa is the best economic performer of the continent. With 13 countries, East Africa recorded the continent’s best economic performance with a GDP growth rate of 5.9 percent in 2017, a rate much higher than the growth recorded by the other regions of the continent, and above the continental average of 3.6 percent. Ethiopia, Tanzania, Djibouti, Rwanda, Seychelles and Kenya were major contributors to growth. The outlook remains positive for 2018 and 2019, with growth expected to continue, reaching 5.9 percent in 2018 and 6.2percent in 2019.

Growth in West Africa rebounded to 2.5 percent in 2017 and is projected to rise to 3.8percent in 2018 and 3.9percent in 2019.

The decline in the price of raw materials and the unimpressive performance of Nigeria, which alone accounts for about 70 percent of the sub region’s GDP, were some of the key factors identified as responsible for stagnation. Central African region on one hand recorded 0.9 percent real GDP in 2017, the lowest growth rate of the continent, although it represents a relative improvement over growth of 0.1percent in 2016. This sub regional performance masks many disparities between countries: relatively good growth for Cameroon and the Central African Republic, and very low growth for Equatorial Guinea and Congo.

The economic difficulties in Central Africa are largely due to lower raw material prices, which some countries in the region are heavily dependent on, as well as recurring security threats in others.

However, the outlook for 2018 and 2019 is more encouraging, fuelled by rising world prices for raw materials and domestic demand. According to the bank’s projections, real GDP growth in Central Africa is expected to reach 2.4% in 2018 and 3% in the following year.

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