Africa’s Growth prospect looking good over the next two years


East Africa remains the fastest-growing sub-region in Africa, with an estimated growth of 5.6 percent in 2017, up from 4.9 percent in 2016. Growth is expected to remain positive, with forecasts showing it reaching 5.9 percent in 2018 and 6.1 percent in 2019, according to the African Development Bank’s flagship publication African Economic Outlook (AEO).
The publication states that quite a number of the continent’s success stories, which it defines as growth spikes not followed by crisis, can serve as a source of inspiration for African policymakers and suggest ways to avoid failed takeoffs.
“The experiences of countries such as Mauritius, Ethiopia, and Rwanda provide useful lessons for the entire continent. Successful take-offs require productivity growth. Labor force reallocations from the traditional, subsistence, low-productivity sectors to the modern high-productivity sectors must be a key part of African growth accelerations,” it reads.
Accelerated growth not only requires the creation of jobs in modern agriculture, industry, and services, but also policies that empower the poor and the low-skilled workers so that they can take advantage of the new opportunities that arise with structural transformation.
The strong growth that is seen in East Africa, mainly in countries such as Djibouti, Ethiopia, Kenya, Rwanda, Tanzania and Uganda, have been primarily spurred by private consumption and public investment.
“In a few countries, continued expansion of services, including information and communications technology, will be the key. Manufacturing activity may increase the share of industry, particularly in Kenya and Tanzania,” the report states. It further suggests that African countries should strengthen their economic resilience and dynamism to lift their economies to a new growth equilibrium driven by innovation and productivity.
The African Economic Outlook report provides short-to-medium term forecasts on the evolution of key macroeconomic indicators for all 54 regional member countries, as well as analysis on the state of socio-economic challenges and progress made in each country.
The 2018 report that was released in January has a rigorous and comprehensive analysis of the state of the African economy, country profiles with key recent developments and prospects for each country, while a set of Regional Economic Outlooks for Africa’s five sub regions will be soon published by the African Development Bank.