Sub-Saharan Africa’s recovery will progress slowly into next year, despite a historic free-trade agreement being signed earlier in March. But as Pascale Davies reports, there is a glimmer of hope for some of the continent’s economies.
Africa made history back in March, when 44 leaders signed up to a continental free-trade agreement in Rwanda.
Though it encompasses 1.2 billion people, critics say it’s done little to help the economy or lift its people out of poverty.
ECONOMIC ANALYST, MICHAEL KOTTOH,
“If the Africa free trade area is to work, it’s important that we see more manufacturing and agro processing and processing generally in the continent. Otherwise there is very little production to trade with our neighbouring countries.”
The World Bank dropped its growth forecast for the continent from 3.1 to 2.7 percent.
That wasn’t helped by difficulties faced by the two economies that usually prop up the continent
Weak household consumption growth and a contraction in agriculture hit South Africa
While Nigeria was struck by lower oil production – which offset the extra benefit of higher oil prices.
Alarm bells also sounded over the rate at which some countries are taking on debt.
The IMF reported that liability inflows rose from $3 billion in 2000 to $60 billion in 2017.
IMF DIRECTOR – AFRICA, SELASSIE ABEBE,
“What we’ve seen is a pronounced increase in debt in the last couple of years and there of course it reflects the big hit to their economies following the commodity price crash.”
As well as taking on high levels of debt,
other countries like Kenya, Somalia, and Zimbabwe have hiked taxes, which they say is to carry out development goals.
And that’s made life too expensive for many, especially in the world’s youngest country, Sudan, whose government is fighting to prevent economic collapse and civil disorder as the year ends.
KHARTOUM RESIDENT, MARWA MAGEED,
“The living conditions in Sudan are deteriorating. We have queues everywhere, for fuel, and at ATMs. You can’t even take your money out of the bank. You can’t get your salary. Everything has become very expensive and we don’t know what is happening. It feels like there’s a ticking bomb and we don’t know when it will explode.”
Still – The IMF does have a message of hope this Christmas.
It predicts that most other African countries will have a brighter future and says they could grow by about 3.8 percent in the next year.