African Economic Outlook
OECD Development Centre
- Frequency :
- ISSN :
- 1999-1029 (online)
- ISSN :
- 1995-3909 (print)
- DOI :
This fact-filled annual reference book brings the reader the latest available economic information for most of the economies of Africa. Drawing on the expertise of both the African Development Bank and the OECD, it opens with an overview that examines the international environment, macroeconomic performance, progress towards attaining the Millennium Development Goals, and governance and political issues. The second part provides individual country reports for 30 countries. Each country report provides an assessment of recent economic performance, economic projections, an examination of structural issues, and a discussion of the political and social context. The statistical annex presents 24 tables comparing economic and social variables across all the countries of Africa.
African Economic Outlook 2010
OECD Development Centre
- Publication Date :
- 22 June 2010
- Pages :
- ISBN :
- 9789264086890 (PDF) ; 9789264086524 (print)
- DOI :
Show Abstract /
Since 2002, the annual African Economic Outlook has been charting the progress of the continent’s economies. Africa was propelled by seven years of strong growth from 2002 to 2008, only to be stopped in its tracks by the world’s deepest and most widespread recession in half a century. This edition finds the continent struggling to get back on its feet and identify new, more crisis-resilient practices for moving forward. In this context, decision makers in African and OECD countries, both in the public and private sectors, will find this year's analysis of particular interest for their activities.
Jointly published by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Economic Commission for Africa (UNECA), the African Economic Outlook project is generously supported by the European Development Fund. It combines the expertise accumulated by the OECD – which produces the OECD Economic Outlook twice yearly – with the knowledge of the AfDB, UNECA and a network of African research institutions on African economies.
This year’s Outlook reviews recent economic, social and political developments and the short-term likely evolution of 50 African countries. The African Economic Outlook is drawn from a country-by-country analysis based on a unique common framework. This includes a forecasting exercise for 2010 to 2012 using a simple macroeconomic model, together with an analysis of the social and political context. Its overview chapter provides a comparative synthesis of African country prospects which places the evolution of African economies in the world economic context. A statistical appendix completes the volume.
African Economic Outlook 2010 focuses on public resource mobilisation and aid in Africa, presenting a comprehensive review of best practices in tax administration, policies and multilateral agreements, including recommendations for meeting future challenges. The role that aid should play to help African countries mobilise their public resources to meet their development goals is also discussed. The original dataset that resulted from the 50-country analysis will be made available for free on www.africaneconomicoutlook.org.
Show all Abstracts / Country Notes (Online Only)
Despite strong growth of nearly 9% in the non-oil/gas sectors, owing mainly to the excellent performance in the agricultural sector, which grew 17%, overall economic growth in 2009 was 2.2%, down 0.2 percentage points from 2008. ð"is moderate growth, which was not sufficient to ease unemployment and poverty in the country, was due to the drastic decline in government revenue from oil and gas exports, which are the country's main export products. ð"e expected upturn in global demand in 2010 and the consolidation of the public investment programme (PIP) through the 2010-14 plan is projected to increase growth to 3.9% in 2010 and 4.3% in 2011. Inflation, which was contained at 3.9% in 2008, increased markedly in 2009 to 5.7% as a result of the spiralling costs of fresh food products, which rose by 20% during the same period.
Angola was hit hard by the collapse in oil prices in 2009. As one of the worldfs fastest growing economies prior to the global crisis, economic growth came to a standstill. ð"e country suffered negative GDP growth of -0.6% in 2009. However, the economy is expected to pick up substantially in 2010, with growth rising to 7.4%, owing to projected high oil prices. Inflation remained high in 2009, at 14%, and is expected to edge up further in 2010 to 15%.
Benin is one of the few sub-Saharan African countries to have achieved a peaceful political transition at the beginning of the 1990s. ð"e country adopted a new constitution in December 1990, thereby ending the Marxist-Leninist system that had prevailed since 1974 and replacing it with a democratic system. ð"e country has experienced a relatively stable socio-political situation since then. ð"e last presidential elections, which brought President Boni Yayi to power in April 2006, laid the foundations for an economic revival that continued into 2008. Growth slowed in 2009 as a result of the world economic crisis, however, and remained at 3% compared to the 4.5% average over the three preceding years.
ð"e global economic crisis has had a devastating impact on Botswanafs economy, mainly because of the latterfs heavy dependence on the mining sector, which accounts for more than a third of gross domestic product (GDP), and particularly on diamond exports. ð"e collapse in demand for diamonds forced operators to suspend mining activities in late 2008 and early 2009. In contrast, the nonmining sectors of the economy were less affected. Botswanafs banking sector has only limited interactions with the international financial system and thus was insulated to some extent from the effects of the crisis, while other private sectors benefited from increased government spending. Nonetheless, the collapse of diamond production caused GDP to fall sharply in the first quarter of 2009. When diamond mining resumed in the second quarter, the economy picked up again, but owing to the sharp first-quarter decline, annual GDP for 2009 fell by an estimated 4% with respect to 2008. In 2010, the mining sector is expected to benefit further from the global recovery. At the same time, the government is starting to tighten spending in order to ensure long-term fiscal sustainability. ð"e economy will thus begin to grow again with rates of 3.4% in 2010 and 3.1% in 2011, driven by mineral exports and services.
Burkina Faso remains highly vulnerable to external shocks and adverse weather conditions, which increases the countryfs risk of debt overload. ð"e economy is insufficiently diversified and heavily dependent on gold and cotton exports.
ð"e Burundian economy witnessed a contraction in growth in 2009. ð"e rate of real gross domestic product (GDP) growth fell from 4.3% in 2008 to 3.3% in 2009. ð"e main causes were: (i) the ongoing effects of the international financial crisis; (ii) the drop in coffee and food crop production; and, (iii) reduced industrial production, mainly in the sugar sector. Although production in the tertiary sector expanded by almost 12%, this was not sufficient to stem the downward trend in GDP growth. In Burundi, as in many developing economies, the primary sector plays a central role in economic growth.
ð"e growth rate of the Cameroonian economy slowed from 2.9% in 2008 to an estimated 2% in 2009. ð"is slowdown can be attributed to the deterioration of the trade balance, the sluggish international economic climate and the countryfs increasing fiscal difficulties due to the combined effects of the global economic and financial crisis, the food crisis and the energy deficit. ð"e government has taken emergency measures to stimulate the agricultural sector, assigning priority to products such as maize, rice, manioc, potatoes, palm oil and plantains. Given the signs of recovery observed in developed countries, real gross domestic product (GDP) growth is projected to rise to 3.5% in 2010 and 4.6% in 2011. According to projections, the improving international environment should strongly boost world demand and thus stimulate commodities exports from developing countries.
Cape Verde’s economy was adversely impacted by the global financial crisis with its gross domestic product (GDP) growth rate contracting to 3.9% in 2009 from 5.9% in 2008. Growth decreased owing to the fall in tourism, construction, and foreign direct investment (FDI), but by late 2009 both tourism and construction had started to recover and FDI flows stabilised. Remittances remained fairly constant and even rose by 1.7% in 2009.
Central African Republic
After a gradual economic recovery in 2004 once political peace returned, the country experienced internal and external shocks that disrupted prospects for growth. Real gross domestic product (GDP) advanced by an estimated 2% in 2009.
ð"e year 2009 was marked by a slight decrease in economic activity owing to poor performance in the agricultural sector and the continuing effects of the international financial crisis on the economy. ð"is resulted in total real gross domestic product (GDP) decreasing by 0.8%. Inflation accelerated and reached a yearly average of 10.5% by end-December 2009 owing to an increase in money supply and a weakening in agricultural yields. For 2010/11, government policy aims to keep average annual inflation within the regional target of 3% set by the Central African Economic and Monetary Community (CEMAC). ð"e international financial crisis led to a depreciation in the country's fiscal and external position in 2009.
ð"e Comoros economy continued to stagnate in 2009, with real gross domestic product (GDP) growth estimated at 1.4%. ð"e world recession affected the country mainly by delaying foreign direct investment (FDI) in the tourism sector. Remittances declined slightly, while aid decreased sharply to its 2007 level, after the historical high of 2008.
Congo, Dem. Rep.
Economic growth in the Democratic Republic of Congo (DRC) slowed to 2.5% in 2009 (from 6.2% in 2008) owing to structural problems and the effects of the world economic and financial crisis. It mainly affected the country through shrinking trade and foreign direct investment (FDI) because of lower world demand and a drop in prices for the DRC’s main exports. Growth should recover to 6.5% in 2010 and 8.8% in 2011 as the world economy picks up, debt relief is granted, reforms are made and an agreement with China to build infrastructure in exchange for mining concessions to a Chinese-led consortium goes ahead.
ð"e Republic of Congo has made significant progress in restoring internal political peace and applying reforms launched under the three-year programme agreed with the International Monetary Fund (IMF) as part of the Poverty Reduction and Growth Facility (PRGF). President Denis Sassou Nguesso was re-elected in 2009 for another seven-year term in a vote disputed by the opposition. Despite the world crisis, the economy grew strongly (7.6%), driven mainly by oil production and the construction sector. Forestry and primary timber-processing was badly hit, though, by a drop in external demand and in export prices. Regardless, gross domestic product (GDP) growth remained largely sustained by exports and investment, and should increase to 11.9% in 2010 thanks to projected higher oil production.
ð"e recovery of the Ivorian economy continued in 2009, despite the context of international crisis. Growth reached 3.6% in 2009 and inflation fell, thanks to good supply conditions on the local market and a thaw in international prices. ð"e reunification of the country, uniting former rebel areas in the Centre-Northwest zone with the regions controlled by the regular army, helped to soften the shock of the economic crisis. ð"e country has restored relations with its donors and has adopted a prudent budgetary stance. Other positive factors had an effect in 2009, such as ample rainfall and the favourable trend in coffee, cocoa and oil prices. ð"e recovery should continue in 2010 if the often-postponed presidential and legislative elections take place peacefully. If this is the case, growth should continue to rise to 3.9% in 2010 and 4.5% in 2011.
In 2009, Djiboutifs economic growth slowed, but remained strong at 4.8%. ð"e slowdown in growth was mainly due to the reduction in private investment, as a great deal of foreign direct investment (FDI) was postponed.
Egyptfs economy slowed down in 2008/09. ð"e gross domestic product (GDP) growth rate reached 4.7% (Figure 1). ð"e deceleration of growth was a result of the global crisis. Domestic final consumption proved resilient and increased public investments offset the decline in private investments to some extent. ð"e key driving sectors in the economy were extractive industries, information and communications technology (ICT), construction and wholesale and retail trade. However, all sectors with international linkages were negatively affected by the global crisis especially tourism, the Suez Canal, and workersf remittances. Foreign direct investment (FDI) dropped by around 38.7% in 2008/09.
Equatorial Guinea has been one of the fastest growing economies in the world since large-scale commercial exploitation of oil began in the 1990s. It remains one of Africafs fastest growing economies and also one of the main destinations of foreign investment. However, the country experienced an economic slowdown in 2009, posting a gross domestic product (GDP) growth rate of 1.9%, compared with 11.3% in 2008. ð"e decline was due to a fall in oil prices and oil production in the wake of the global recession. ð"is also caused the share of the hydrocarbons sector to fall from 77% of GDP in 2008 to around 61% in 2009, although it remains the main sector of the economy. After a recession in 2010, the economy is expected to recover gradually and return to positive growth of 2.7% in 2011. ð"e fall in oil revenues has had a major adverse effect on the government budget with the budget surplus falling by 16 percentage points to 6.9% of GDP in 2009. It is projected to rise to 14.4% of GDP in 2010 and further to 17.7% in 2011. In contrast, the current account surplus rose to 8.3% of GDP in 2009, compared with 3.7% in 2008. It is projected to rise to 17.3% in 2010 and further to 19.7% in 2011. Inflation was 5.5% in 2009 and is forecast to fall to 2.4% in 2010. Equatorial Guinea faces no debt problems thanks to its large budget surpluses and external reserves. External debt at the end 2009 was only 1% of GDP and is forecast to fall to 0.7% in 2011.
Ethiopia is a fast growing non-oil economy that achieved double-digit growth in the period 2003/04-2007/08. However, the country has been struggling with the twin macroeconomic challenges of high inflation and very low international reserves since 2007/2008. Economic growth remains robust, with real gross domestic product (GDP) growth of 9.9% in 2008/09, down from 11.6% in 2007/08 . the lowest since 2003/04. ð"is high growth rate has been driven mainly by a boom in services and healthy growth in agriculture, supported by strong service exports and increasing official development assistance (ODA). Growth is expected to slow marginally to 9.7% in 2009/10, owing to the expected weak global recovery. ð"e tight fiscal and monetary policies that seek to contain inflation are expected to slow down domestic demand.
Gabon's macroeconomic situation in 2009 was marked by gloom and uncertainty. President Omar Bongo died in June, and an early presidential election in August was won by his son, Ali Bongo. ð"e climate of uncertainty was due to the international crisis, which compromised the economic recovery.
ð"e Gambia is a small, open economy surrounded by Senegal and the sea. ð"e majority of the population lives on subsistence farming. Nevertheless, a dominantly larger share of value added in the country comes from service industries such as trade, transport and tourism rather than from agriculture. With growth in the past three years averaging 6.3%, ð"e Gambia ranks as one of the highgrowth economies in western Africa.
After about a decade of relatively strong economic performance with real gross domestic product (GDP) growing at an average of about 6% annually over the last five years, there was greater uncertainty about Ghana’s economic growth prospects at the beginning of 2009. Unsurprisingly, economic growth slowed in 2009, to a mere 4.7% – the lowest since 2002 – after rising to a two-decade high of 7.3% in 2008. Economic growth is expected to recover modestly to 6.4% in 2010 and accelerate to 8.3% in 2011 on the back of global recovery, exceptional public investment in the rising oil sector, and revenues from anticipated new oil discoveries.
Economic growth in Guinea-Bissau declined to 2.9% in 2009 from 3.3% in 2008, as a result of political instability and the late arrival of development assistance. However, economic activity was sustained by an exceptional cashew nut harvest. Because of its isolation from the world economy, the global economic and financial crisis did not have a significant direct impact on the economy, although it did on government export revenues and remittances. Growth is expected to increase to 3.4% and 4% respectively in 2010 and 2011, as a result of increased agricultural production and donor support. ð"e major downside risk is new political instability. For the mid term, inflation is expected to remain within the Central Bank of West African States (BCEAO) boundary of 3%, up from a negative rate in 2009.
Guinea enjoys considerable, varied and unexploited economic potential, but is having difficulty making an economic breakthrough. Growth is structurally weak and slow, with inflationary episodes. It has also been hard hit by the oil crisis (2007/08), food crisis (2008) and the financial crisis (2009).
ð"e performance of the Kenyan economy in 2009 was severely affected by three adverse shocks. First, the second-round effects of the global economic downturn depressed Kenyafs main export markets. Second, the erratic, delayed and shorter rainfall had a negative impact on the agricultural and power sectors. ð"ird, the prolonged effects of the 2008 post-election violence depressed investor confidence and had adverse effects on the whole Kenyan economy and population. As a result, the Kenyan economy is expected to have grown by 2.5% in 2009. In spite of the slump of international capital markets, Kenya demonstrated the depth and liquidity of its domestic capital market by successfully floating two infrastructure bonds in 2009.
The global crisis badly affected Lesothofs economy in 2009 and its outlook for 2010 and beyond. Gross domestic product (GDP) growth fell from 4.4% in 2008 to 1.1% in 2009 as the manufacturing and the mining sectors both shrank. ð"e government estimates that employment in the manufacturing sector declined by 4.1% in 2009. Unemployment also increased because of layoffs in the textile industry and the mining sector in South Africa. ð"e number of migrant mine workers in South Africa declined by 10% in the third quarter of 2009.
Liberiafs economic growth has been helped by reconstruction and impressive donor assistance since the end of the countryfs second recent civil war from 1999 to 2003. Real gross domestic product (GDP) was initially estimated to have grown 10.8% in 2009, but this was adjusted down to 4.1% because of delays in getting the key mining and timber industries up to full speed. Growth is expected to be driven by the agriculture (including forestry) and service sectors. ð"e outlook in 2010 and 2011 is positive as the global credit crunch and recession ease. GDP growth is projected to rise about 6.9% in 2010 and 7.7% in 2011.
Libya is one of Africa’s wealthier countries. It has the continent’s largest proven oil reserves and is the third biggest producer behind Angola and Nigeria. Libya was only moderately hit by the global economic and financial crisis. Preliminary data indicate that real gross domestic product (GDP) growth slowed to 2 % in 2009, due to the fall in international oil prices and the Organization of the Petroleum Exporting Countries (OPEC) lower production quotas.
A grave new political crisis hit Madagascar in 2009 and the impact combined with the global financial crisis to send the 2009 gross domestic product (GDP) growth rate plummeting to -4.5%. ð"e international community condemned the change of government as undemocratic, and some external aid, on which Madagascar is dependent, was frozen. Its growth is led by public investment, which in turn is financed by external resources. ð"e outlook for 2010 and 2011 therefore depends on whether the country emerges from the crisis. Even if political events return to normal, GDP should contract again in 2010, because growth drivers, such as tourism and construction, are particularly sensitive to the political crisis. In addition, funding for a ggreen revolutionh has dried up, which could detract from agricultural output.
Macroeconomic policy performance has been generally consistent and strong although government commitment weakened as the country approached and held 2009 presidential and parliamentary elections. Domestic revenue performance was robust at an estimated 29.8% of gross domestic product (GDP) in 2009/10, buoyed by recent institutional and administrative tax reforms. ð"e creation of the Large Tax Payers Unit and the expansion of the auditing function under the Malawi Revenue Authority have helped improve the efficiency of tax mobilisation. However, an escalation in domestic debt which increased domestic interest payments and expansion of the fertiliser subsidy well beyond initial budget plans offset the benefits of the strong revenue performance, widening the fiscal deficit to 5.4% of GDP in 2009.
ð"e government continued to implement its 2007-11 Strategic Framework for Growth and Poverty Reduction (SFGPR) in 2009 amid world financial and economic crisis. With a 7% annual average growth target, it aims to speed up progress towards the Millennium Development Goals (MDGs). Despite the international crisis, which complicated economic management, the economy performed satisfactorily. Real gross domestic product (GDP) grew 4.3%, mainly due to satisfactory agricultural results and good rainfall. Continued cautious budget and monetary policies, as part of formalising public finance management, curbed inflation and growing budget and current account deficits.
Mauritania had a tough time in 2009 after several years of growth. Gross domestic product (GDP) shrank 1.2% (compared with a 3.7% rise in 2008) due to a national political crisis and the world economic recession, which hit demand for the countryfs raw materials, chiefly minerals, which generate most of its income. ð"e world price of iron fell 36% and that of copper by 28% between 2008 and 2009. Food shortages in 2008 left deep economic scars and the government set up a 42 billion Mauritanian ougiya (MRO) special intervention programme (SIP) to help the poor cope with high food prices.
Since the outbreak of the global financial crisis, government policy has been to press ahead with reform and diversification while preparing the economy for an eventual global recovery. ð"e aim is to make the country more resilient to external shocks and to increase its competitiveness in global markets. A key element is a focus on higher value-added services such as information and communications technology.
Moroccofs economic performance remained strong in 2009, despite poor international conditions. Initially, the instability of financial markets, soaring oil prices, and the loss of impetus of the countryfs major trading partners led to fears of the worst. However, the fundamentals have remained stable, attesting to greater ability to withstand external shocks. Gross domestic product (GDP) growth reached 5% in 2009, buoyed by an exceptional agricultural campaign, vigorous domestic demand and economic support measures. ð"ese latter were introduced to counteract the effects of the crisis, perceived since the second quarter of 2008.
Mozambique weathered the global financial crisis relatively well, maintaining strong, if lower growth than in 2008 while inflation was subdued. ð"e limited exposure of the countryfs banking system to international financial markets minimised the direct impact of the global crisis. Supportive government measures, such as fuel subsidies, helped sustain growth together with an increase in agricultural output.
Namibia’s economy, heavily dependent on mining exports, contracted 1.5% in 2009, only the second negative growth rate recorded since independence in 1990 as the global crisis undercut overseas demand. Diamond output and prices fell sharply and tourism was badly hit, forcing job losses in many areas.
Nigerfs economy, totally dominated by an agricultural sector suffering from severe drought, shows real signs of weakness. As a result, economic growth in 2009 fell by 0.9%, after rising by 9.5% in 2008. ð"e 2009/10 harvests look poor compared with 2008, particularly for millet and sorghum. Agricultural production plummeted in 2009 by 13.6%, after rising by 23.8% in 2008.
Nigeria, the eighth largest oil exporter in the world and Africafs second largest economy, continued to be buffered by the global recession in 2009. Reforms initiated earlier in the decade have strengthened the countryfs capacity to manage the crisis and avert the boom-bust pattern characteristic of past oil cycles. Gross domestic product (GDP) growth fell to 3% in 2009, compared with 6% in 2008. It is projected to rise to 4.4% in 2010 and 5.5% in 2011, driven by a recovery in oil prices. Oil accounts for about 80% of fiscal revenues and 95% of exports. Oil revenues fell by 7.8 percentage points of GDP in 2009, moving the fiscal accounts from a surplus of 3.8% of GDP in 2008 to a deficit of 5.2% in 2009. A planned sovereign bond issue of 500 million US dollars (USD) (0.5% of GDP) has been shelved because of adverse market conditions. ð"e external debt at the end of 2009 is estimated at only 2.2% of GDP. ð"is suggests that debt sustainability is not likely to pose a major problem in the coming years. ð"e current account surplus declined to 11% of GDP in 2009, compared to 21% in 2008.
In 2009 Rwandafs gross domestic product (GDP) grew by 4.5% and is projected to recover moderately in 2010 to 5.1% (Figure 1). ð"e impressive growth that the country has experienced over the last six years has largely been driven by the good performance of the agricultural sector. However, the government is making efforts to diversify the economy as a long-term strategy for sustaining longterm growth. In particular, Rwanda is the second most densely populated country in sub-Saharan Africa after Mauritius with a population density of 384 inhabitants per square kilometer in 2008. While practical steps have been taken to address environmental challenges stemming from population pressures, which threatened agricultural productivity, further productivity growth in agriculture is likely to require higher investment levels than has been the case before. In addition, 28% of Rwandans are food-insecure in spite of improvements in this field. ð"e country also remains highly dependent on foreign aid, which accounted for more than 45% of the government budget in 2009.
The Democratic Republic of Sao Tome and Principe (STP) is Africafs smallest economy. Its gross domestic product (GDP) for 2009 is estimated at around 190 million US dollars (USD), with a GDP per capita of USD 1 160. GDP growth slowed to an estimated 4.1% in 2009, from 5.8% in 2008. For 2010 and 2011 GDP growth is forecast to increase by 4.6% and 5.1%. Construction and commerce drove economic activity in 2009, compensating for the drop in foreign direct investment (FDI) and tourism caused by the international crisis. Inflation is largely determined by imported food and oil prices, coupled with the strong inflow of foreign currency related to aid and oil-exploration activities. ð"e inflation rate declined to around 17.3% in 2009, down from 26.1% in 2008, and the aim is to reduce it further in the mid term.
As with its main trading partners, Senegal was strongly affected by the global financial crisis in 2009 and this was compounded by domestic shocks. ð"e chief consequences of the crisis on the Senegalese economy were a fall in private investment, a slowdown in tourism and a decline in remittances, leading to reduced economic activity. Tax revenues remained stable however.
The Seychelles economy is driven by tourism and fish exports. In 2009 it experienced an estimated negative growth rate of 6.8% as a result of a decline in tourism and tuna export earnings, which fell by about 12% and 8% respectively. Furthermore, recent changes in the climate and piracy activities in and around its territorial waters have affected the tuna industry, with the total fish catch declining by about 50% in 2009. Seychelles also imports over 90% of its total primary and secondary production inputs. As a result, any negative impact on tourism and fishing translates into a fall in gross domestic product (GDP), a decline in foreign exchange receipts and budgetary difficulties. ð"e economy is thus extremely vulnerable to external shocks.
The gradual projected recovery in 2010 mostly reflects continued buoyant agricultural production and services, and exports that are slowly turning around. Nevertheless, exports of minerals, driven by the global return to growth, remain subdued because of compressed prices, reduced investment and continued production difficulties in the rutile sub-sector. Although growth is projected to increase to 5% in 2011 thanks to stronger global recovery and rising exports, returns on infrastructure investments and an improved business climate, it will remain below the pre-crisis rates. Even small differences in growth are potentially very damaging for a vulnerable country such as Sierra Leone, given the widespread poverty and the risk of policy reversal and social instability. For the future the key policy priority is thus to bring the economy quickly back on a high and broad-based growth path, as the current slowdown raises already high unemployment, hampers progress with poverty reduction and heightens risks of resurgence of fragility. In this context, stable and predictable foreign aid delivery remains crucial.
After several years of sustained growth, for the first time since 1992 South Africafs economy fell into recession with GDP contracting by 1.8% in 2009. ð"e economic slowdown had started already in 2008 with the weakening of domestic demand and was exacerbated when the global crisis led to a sharp fall in exports. Growth is expected to recover gradually to 2.4% in 2010, helped by the recovery of global demand and boosted by the FIFA World Cup, and to accelerate further in 2011 to 3.3%.
Sudan is the third largest oil producer in sub-Saharan Africa after Nigeria and Angola. Oil remains the main driver of growth although agriculture still accounts for more than one third of GDP and nearly two-thirds of employment. Oil accounted for 22% of GDP in 2008 and oil revenue has contributed greatly to the reconstruction of the economy in the aftermath of the civil war, especially in enabling the government to develop the road and energy infrastructure. Apart from this spending, there is no other programme of large scale distribution of oil revenues across the states nor focus on the poor. Sudan has been adversely affected by the global economic slowdown and the decline in international oil prices since the last quarter of 2008. Oil revenue dropped by about 21% in 2009 from USD 11.1 billion in 2008 but it is expected to increase to USD 12.4 billion in 2010 as prices recover.
Swaziland is Southern Africafs second-smallest economy after Lesotho and it faces a host of economic challenges in the short and medium term. ð"e combination of low investment, the end of EU preferential treatment for the countryfs main sugar and textile exports, low productivity, deteriorating trade receipts, low domestic resource mobilisation and the ongoing effects of the global economic crisis mean that sustained growth will remain elusive. Indeed, years of persistently sluggish growth have resulted in an expansion of poverty and unemployment. Moreover, the alarming 32.4% prevalence rate of HIV/AIDS will continue to exert undue pressure on government resources and has restricted Swazilandfs annual population growth to about 0.4% since 1997.
Despite the persistence of structural shortfalls, Tanzaniafs annual growth averaged 7% of gross domestic product (GDP) between 2001 and 2008. In 2008, GDP rose by 7.5% making Tanzania one of the fastest growing economies in sub-Saharan Africa. ð"e onset of a series of globally-induced crises including fuel price hikes, and the second and third round effects of the global financial crisis have curtailed this record however. Economic growth in 2009 is estimated at 5.5%. Inflationary pressure has also intensified since 2008 pushing the inflation rate to a double-digit annual average of 10.3% in 2008 and 12.2% in 2009.
With a growth rate of 2.2%, Togo’s real gross domestic product (GDP) began a slight recovery in 2009, which should continue in 2010 and 2011 with growth rates of 2.5% and 3.6% respectively. Inflation slowed considerably during 2009 with a rate of 1.9% for the year, against 8.7% in 2008 primarily due to a fall in oil prices and food, thanks to the country’s abundant agricultural output. Because of this decelerated inflation, since November 2009, Togo has met the 3% convergence criterion established by the West African Economic and Monetary Union (WAEMU).
thus far, Tunisia has managed the consequences of the recent global crisis relatively well. Although real gross domestic product (GDP) growth fell significantly to 3.1% in 2009 (from 6.3% in 2007 and 4.6% in 2008), this was partly offset by a good cereal harvest and strong activity in the mining-industry and energy sectors.
The Ugandan economy grew at the impressive rate of 7% in 2009, despite the continued weakness of the world economy. ð"e effects of the disruption of the trade link between Uganda and Kenya following the post-election violence in Kenya in early 2008 eased, but domestic fuel prices remain high. Demand for Ugandafs exports and remittances from abroad started to pick up as the global recession also eased. As a result, the growth rate is expected to rise to 7.4% in 2010 and further improve to 7.9% in 2011, and it may be even higher if the government lives up to its promises to start oil production in the next two or three years. Growth in 2009 was led by the services and industrial sectors, while agricultural performance remained sluggish. Services account for about half of gross domestic product (GDP), the industrial sector for 26% and the primary sector for 25%. On the demand side, growth was mainly driven by private consumption (up 6.7%), but investment also grew strongly. Investment growth will accelerate over the forecast period, with growth rates for both private and public investment projected at 17% in 2010 and 18% in 2011.
After 30 years of relatively dismal economic performance, Zambia’s macroeconomic situation has changed in the last 10 years with gross domestic product (GDP) growth at an unprecedented average of 4.8% between 1999 and 2009. Growth continues to be driven by increased output in the construction, mining and agriculture sectors. Nonetheless, the growth process continues to be severely limited by: energy bottlenecks; public-sector constraints, mainly in the civil service; infrastructural problems; and insufficient progress towards key institutional reforms. On a positive note, GDP growth for 2009 was estimated at 6.1%, a relatively small dip from 6.3 in 2008, and the 2010 and 2011 GDP growth forecasts stand at 5.5% and 5.7%, respectively.
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