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The franc zone behind East Africa is the second fastest growing region of Africa: GDP growth is estimated at 4.9% by 2019. The report, commissioned by ICAEW and produced by partner and forecaster Oxford Economics, highlights the role of economic diversity in weathering the storm of unstable prices for oil and commodities.
According to the report, there is concern in Africa that a slowdown in economic growth in China will result in lower demand for commodities and hence lower prices. As was the case during the last dramatic fall in commodity prices, non-diversified economies will be under pressure as current account balances deteriorate, currencies will be under pressure, prices will rise and central banks will increase interest rates.
At the launch of the latest report, Michael Armstrong, regional director of ICAEW for the Middle East, said. Asia and Africa, said that the strength of the diversified economies of the east of the continent plays a major role in protecting them from shocks related to commodity price fluctuations.
"As since the sharp drop in oil and commodity prices that began in 2014, East Africa is the region of Africa that would have experienced the fastest growth in GDP. in 2018 and should continue to do so for the next two years, " said Mr. Armstrong.
"The growth of the region is mainly driven by the good performance of the two major economies: Kenya, a $ 90 billion economy is expected to grow by 5.5% in 2019, and Ethiopia, an economy of $ 80 billion, 7.9% growth, Kenya, in particular, has a dynamic banking sector and its best performing banks are regional leaders ", he added.
GDP growth in the franc zone is estimated at 4.9% for 2019. Most of the growth will take place in Ivory Coast, where real GDP growth of 7.0 is expected. % this year, largely due to growth in services (although cocoa exports continue to rise). crucial).
North Africa is a bit mixed: Egypt, Morocco and Tunisia have diversified economies, while Algeria and Libya are extremely dependent on oil and gas. The year 2019 should be very disappointing for the last two. The Libyan economy will shrink by 4.1% and Algeria will only grow by 2.0%. This contrasts with a growth rate of 5.5% in Egypt, where the government has been exemplary in implementing a constructive economic policy. However, to sustain this type of growth in the future, the government will need to encourage private sector growth and improve private sector access to finance.
Southern Africa is the region with the lowest growth of the continent. GDP growth is forecast at just 1.8% this year, less than a third of East Africa 's growth rate. Growth in the South is slowed by South Africa, the region's dominant economy (accounting for more than two-thirds of regional output), where growth is expected to remain at a low level in 2019 – the same level as in 2018. Slow growth in Angola (+ 1.1% in 2019, after a contraction of 2.5% in 2018), the second largest economy in the region, is an additional drag on growth. of the region.
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