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The 2010 forecast
Published: 29 December, 2009
This Is Africa’s survey of leading economists examines key drivers of growth and gives an insight into how influential thinkers see the continent’s prospects
In the last quarter of 2009, the developed economies of Europe have, one-by-one, dragged themselves out of recession and back to GDP growth. The final toll, according to the International Monetary Fund, was a 1.1 percent contraction in the global economy, led by in part by a 3.4 percent contraction in developed markets, although perhaps more significant was the curtailment of the expansion in emerging and developing economies, which have for the past five or so years been the principal driver of global growth.
Africa looks to have recorded growth of 2.2 percent during 2009, although this figure masks wide variations within the continent. South Africa in particular was hit hard, recording a 2.2 percent contraction. Given the importance of the country to its sub-region, this is quite significant. Some estimates suggest that an increase of 1 percent in South Africa’s growth translates into as much as 0.9 percent growth in its neighbours, so the slowdown there has had an effect on the numbers across the continent.
Botswana, Namibia and Lesotho also slid into recession, the former principally due to the collapsing market for its primary export – diamonds. The West African hydrocarbon economies of Gabon and Equatorial Guinea also contracted as demand and prices fell, and Angola, which was sub-Saharan Africa’s biggest producer for several months of 2009, narrowly avoided recession, with 2008 growth of 13.2 percent falling to just 0.2 percent in 2009. Madagascar, paralysed as it is by a continuing political standoff, also saw its economy shrink. If the IMF’s forecasts are to be believed, only Equatorial Guinea’s recession will persist into 2010. The fund is predicting continent-wide growth of 4.1 percent.
This is Africa has surveyed a group of leading economists, representing a cross section of the international investment and development finance community. The results give a picture of how those with influence and capital perceive the shape of Africa’s recovery from the global downturn in 2010. The median GDP growth prediction from the perception survey was 4.5 percent, and while 35 percent of the economists surveyed roughly agreed with the IMF forecast of close to 4 percent, 50 percent thought it was too conservative. Only a few were more pessimistic about Africa’s growth.
What drives that uptick is, of course, a complex mix of trade dynamics, commodity markets and risk appetite amongst corporate and financial investors. Perhaps more importantly, those surveyed suggest, is the domestic underpinning of Africa’s resilience in the face of the downturn, which bodes well for its return to the high levels of growth that it has seen since the turn of the century.
To discover what drives Africa’s growth recovery means finding out what has driven its uninterrupted growth for the past 15 years. GDP has been appreciably on the rise since 1994, and while that decade was not characterised by political stability and high standards of governance, the figures show that the stirring of the continent’s economic turnaround predated the bull market for commodities that accompanied the runaway growth in the four biggest emerging markets – Brazil, Russia, India and China – and global concerns over energy security.