Africa’s economy forecast to grow by 3.4% despite external shocks- African Economic Outlook 2020

AFRICA –The African Development Bank Economic Outlook for 2020 has revealed that Africa’s economic growth remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 percent in 2020 and 4.1 percent in 2021.

AfDB partly attributed the slower than expected growth partly to the moderate expansion of the continent’s “big five” — Algeria, Egypt, Morocco, Nigeria, and South Africa – whose joint growth was an average rate of 3.1 percent, compared with the average of 4.0 percent for the rest of the continent.

Former Liberian President Ellen Johnson Sirleaf who was present at the launch of the Economic outlook publication commended the Bank for upholding the confidence of the people of the continent

 “… because we trust you. As simple as that. Because we trust you to share our vision. We trust you to understand our limitations,” said Sirleaf.

The bank noted that in 2019, for the first time in a decade, investment expenditure, rather than consumption, accounted for over 50% of GDP growth.

This shift according to the AfDB can help sustain and potentially accelerate future growth in Africa, increase the continent’s current and future productive base, while improving productivity of the workforce.

Overall, the forecast described the continent’s growth fundamentals as improved, driven by a gradual shift toward investments and net exports, and away from private consumption.

East Africa maintained its lead as the continent’s fastest-growing region, with average growth estimated at 5.0 percent in 2019.

 North Africa was the second fastest, at 4.1 percent, while West Africa’s growth rose to 3.7 percent in 2019, up from 3.4 percent the year before.

Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth.

The 2020 AEO, themed Developing Africa’s workforce for the future, however, called for swift action to address human capital development in African countries, where the quantity and quality of human capital is much lower than in other regions of the world.

“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics.

The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,” the report noted.

The report also stressed on the need to create more employment opportunities for the increasing number of African youths who enter the job market every year.

“Youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, African Development Bank President, who unveiled the report.

The African Economic Outlook, published annually since 2003, provides compelling up-to-date evidence and analytics to inform and support African decision makers.

The publication has over the years built a strong profile as a tool for economic intelligence, policy dialogue and operational effectiveness.

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