Will Ethiopia's Peace Deal Last?

 Foreign Policy published on 19 December 2022 a commentary titled "Will Ethiopia's Peace Deal Last?" by Addisu Lashitew, McMaster University, Stefan Dercon, University of Oxford, Christian Meyer, University of Oxford, and Mehari Taddele Maru, European University Institute in Florence.

A panel of experts question if the Ethiopian peace deal will stand the test of time.  Will Abiy Ahmed's ambitious reform agenda get back on track? Will there be economic stability? Will there be accountability for the perpetrators of war crimes during the conflict?

African Economic Outlook 2019

The African Development Bank has just released its African Economic Outlook 2019 in English, French and Portuguese.

After tepid real GDP growth of only 2.1 percent in 2016, Africa's economy recovered with 3.6 percent growth in 2017 and 3.5 percent growth in 2018. Growth is expected to accelerate to 4 percent in 2019 and 4.1 percent in 2020. In 2019, 40 percent of African economies are projected to see growth of at least 5 percent.

Five trade policy actions could potentially bring Africa's total gains in 2019 to 4.5 percent of its GDP:

--eliminating all applied bilateral tariffs in Africa;
--keeping rules of origin simple, flexible, and transparent;
--removing all nontariff barriers on goods and services;
--implementing the World Trade Organizations's Trade Facilitation Agreement to reduce cross border time and transaction costs tied to nontariff measures; and
--negotiating with other developing countries to reduce their tariffs and nontariff barriers by 50 percent.

Africa faces an urgent need to create jobs in higher productivity sectors by developing a strong manufacturing sector. This will not be achieved, however, if constraints to doing business such as poor governance, low institutional quality, and inadequate infrastructure continue to limit firm survival and dynamism. At the current rate of labor force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising.

African Economic Outlook 2018

The African Development Bank has just released its "African Economic Outlook 2018."

Real output growth in Africa is estimated to have reached 3.6 percent in 2017, up from 2.2 percent in 2016, and to accelerate to 4.1 percent in 2018 and 2019. The recovery in growth has been faster than envisaged, especially among non-resource-intensive economies. Debt levels for most countries have not yet breached the traditional threshold indicators. They have actually declined in nine African countries. But Africa's solid growth rates have not been accompanied by high job growth rates. The lack of job growth has retarded poverty reduction. A priority for African governments is to encourage a shift toward labor-absorbing growth paths, especially modernizing the agricultural sector, which employs most of the population and is typically the main step toward industrialization.

The study includes the following sections:

--Africa's macroeconomic performance and prospects.
--Growth, jobs, and poverty in Africa.
--Africa's infrastructure: great potential but little impact on inclusive growth.
--Financing Africa's infrastructure: new strategies, mechanisms, and instruments.

African Economic Outlook 2017

The African Development Bank, the Development Centre of the Organization for Economic Co-operation and Development, and the UN Development Programme published on 22 May 2017 "African Economic Outlook 2017: Entrepreneurship and Industrialization."

This annual massive study reports that in 2016, Africa's economic growth slowed to 2.2 percent from 3.4 percent in 2015 due to low commodity prices, weak global recovery and adverse weather conditions, which impacted agricultural production in some regions. Africa's economic growth is expected to rebound to 3.4 percent in 2017 and 4.3 percent in 2018.

Although economic headwinds experienced in the last two years appear to have altered the "Africa rising narrative," the African Development Bank believes the continent remains resilient, with non-resource dependent economies sustaining higher growth for a much longer period. With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow even faster and more inclusively.

Sub-Saharan Africa Economic Outlook (English and French)

The IMF released in May 2017 its "Regional Economic Outlook: Sub-Saharan Africa."

In 2016, growth in Sub-Saharan Africa slowed in about two-thirds of the countries in the region and is estimated to have reached just 1.5 percent. This marked the region's worst performance in more than two decades. A rebound to 2.5 percent in 2017 will be driven by one-off factors in the three largest economies--a recovery in oil production in Nigeria, higher public spending ahead of elections in Angola, and the fading of drought effects in South Africa--combined with improvements in their terms of trade. Nonetheless, the underlying regional momentum remains weak and Sub-Saharan African growth will continue to fall well short of past trends and barely exceed population growth.

The report contains sections on restoring the conditions for strong and sustainable growth, restarting Sub-Saharan Africa's growth engine, and the informal economy in Sub-Sahara Africa.

Most Attractive African Countries for Investment

Ernst and Young published in May 2017 its report on the 25 countries in Africa that are most attractive for foreign investment. The top ranked country in 2017 was Morocco followed by Kenya. Tanzania ranked number 5 and Uganda number 6. Ethiopia ranked number 20; no other country in the Horn of Africa made the top 25.

In 2016, the United States initiated the largest number (91) of FDI projects valued at $3.6 billion dollars and creating 11,430 jobs. France initiated the second largest number (81) of FDI projects valued at $2.1 billion and creating 8,087 jobs. China was third with 66 projects initiated but valued at $36.1 billion and creating 38,417 jobs. The dollar value of this figure needs to be treated with caution as its exceeds China's official cummulative FDI figure for all Africa through 2014.

The Africa Competitiveness Report 2017

The World Economic Forum has published "The Africa Competitiveness Report 2017: Addressing Africa's Demographic Dividend."

The report highlights areas requiring policy action and investment to ensure that Africa lays a solid foundation for sustained inclusive growth. It discusses the barriers and challenges to putting Africa's economies onto a solid footing and helping them to achieve sustainable, broad-based growth, taking into account rapid demographic changes. The strong economic performance of a number of African countries demonstrates Africa's resilience and brings optimism about Africa's future growth prospects. The report includes detailed discussions of Kenya, Uganda, Tanzania, and Ethiopia, but not any other country in the Horn of Africa.