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Africa’s economic growth expected to rebound in 2017 – AfDB

22 May 2017
Financial Nigeria

Summary

The 2017 African Economic Outlook reports that the continent will grow by 3.4 per cent in 2017 and 4.3 per cent in 2018, assuming commodity prices recover, the world economy strengthens, and domestic macroeconomic reforms are entrenched.

Akinwumi Adesina, President, African Development Bank

Africa is expected to witness a rebound in GDP growth in 2017 as global commodity prices recover, according to the 2017 African Economic Outlook released today by the African Development Bank. The report says Africa will grow by 3.4 per cent in 2017 and 4.3 per cent in 2018, assuming commodity prices recover, the world economy strengthens, and domestic macroeconomic reforms are entrenched.

The projected rebound in Africa’s economic growth this year comes after the continent’s GDP growth slowed to 2.2 per cent in 2016 from 3.4 per cent in 2015. The slowdown was due to low commodity prices, weak global recovery, and adverse weather conditions that impacted agriculture production in some countries.

Besides growth, the AfDB report says foreign direct investment is projected to reach $57 billion in 2017 from $56.5 billion last year. FDI has diversified away from the natural resources sector to other sectors such as construction, financial services, manufacturing, transport, electricity, and information and communication technology.

“Although economic headwinds experienced in the last two years appear to have altered the Africa rising narrative, we firmly believe the continent remains resilient, with non-resource dependent economies sustaining higher growth for much longer spell,” said Abebe Shimeles, Acting Director, Macroeconomic Policy, Forecasting and Research Department, at the African Development Bank. “With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow even faster and more inclusively.”

The annual report was released as the AfDB began its annual meetings, hosted by India in Gujarat – the home state of Prime Minister Narendra Modi. The prime minister had invited African leaders to a summit in 2015, seeking to promote 'south-south' economic ties with a continent that has a large Indian diaspora but has seen far larger inward investment from China, according to Reuters.

The AfDB report called on African governments to push their agenda for job creation with more ambitious and tailored policies given that 54 per cent of the population in 46 African countries are still trapped in poverty. The report also urged governments to promote entrepreneurship and develop industrial strategies focused on startups and small and medium scale entreprises.

“The key to successful development in Africa is to nurture the emerging culture of entrepreneurship, to use the famous words of Hernando De Soto, “âel otro senderoa” (the other path) for development; a path that can unleash high-octane creativity and transform opportunities into phenomenal realisations,” said Abdoulaye Mar Dieye, Regional Director for Africa at the United Nations Development Programme.


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