Africa economic outlook positive, except South Africa
While significant growth is forecast for five African countries that form part of the top-ten biggest growing economies in the world, this is not the case for South Africa.
Speaking at the Frontier Advisory’s Africa Outlook 2015 forum, CEO Martyn Davies pointed out that the Democratic Republic of Congo, Cote d’Ivoire, Congo, Mozambique and Tanzania would double their growth domestic product (GDP) in less than ten years. In contrast, South Africa, at its current growth rate, would take almost 50 years to double its economy.
He also noted that by 2025, Nigeria’s GDP would be $1-trillion, with a projected 6.97% actual growth; Ethiopia would have a $100-billion economy by 2021, with a projected growth rate of 8.20%, while Ghana and Kenya, with actual growth rates projected at 4.47% and 5.34%, respectively, would have GDPs of $100-billion by 2027.
South Africa’s projected actual growth rate was a meagre 1.4%. “If every country could reach 7%, they would effectively double their GDP every ten years. This is why speed of growth matters,” Davies noted.
Davies pointed out that there was a significant shift in investment interest from West Africa to East Africa – away from commodities-driven economies to “real economies that actually generate value”.
“South Africa’s growth is lacklustre, and Eskom is not [helping],” International Monetary Fund South Africa senior resident representative Dr Axel Schimmelpfenning said.
Davies agreed, stating that despite China’s growth “cooling off”, the Asian country was still spending 48% of its GDP on infrastructure, while South Africa, equal to Brazil, was only spending 18%.
“The bottom line is that we are still fairly positive on the growth front. The main challenge is sustaining growth, but making it more inclusive,” Schimmelpfenning concluded.
By: Megan Van Wyngaardt