Asia Will Juice Africa's GDP Growth in 2023

 African Business published on 19 January 2023 an article titled "AFDB: Africa Will Grow 4% in 2023 as China Recovers" by Leo Komminoth.

Africa's GDP grew 3.8 percent in 2022 and is expected to increase to over 4 percent in 2023 with a risk of a continent-wide recession close to zero.  The African Development Bank believes the continent can reach this number partly because Asia and especially China are recovering after 3 years of COVID-19 polices.  Asia accounts for 40 percent of Africa's merchandise exports.

IMF Predicts Ethiopia Will Lead GDP Growth in Africa in 2018

Ventures Africa posted on 18 April 2018 an article titled "Africa Tipped for Growth in 2018 as IMF Dismisses Impact of US-China Trade War" by Feranmi Akeredolu.

The International Monetary Fund predicts that Ethiopia will have the fastest GDP growth in Africa in 2018 at 8.5 percent. Cote d'Ivoire, Senegal, and Rwanda are close behind.

Growth Outlook for Africa Down but Fine for Some

Ernst and Young published in December 2016 its Africa Attractiveness Year End Update. 2016 has been the worst year for average economic growth across sub-Saharan Africa in over 20 years, mainly due to challenging conditions in the three largest economies: Angola, Nigeria, and South Africa. A number of other economies, however, including Cote d'Ivoire, Senegal, Ethiopia, Kenya, Tanzania, Mozambique and Egypt have done well and are expected to sustain high growth rates over the next five years.

Africa: Overcoming the Emerging Market Downturn

The Atlantic Council published in April 2016 a report titled "Embracing Impact: How Africa Can Overcome the Emerging Market Downturn" by J. Peter Pham and Aubrey Hruby.

The authors conclude that African countries that depend on one or two commodities for economic growth have already felt the negative impact of the economic downturn in China, Russia, and Brazil.  African economies that have diversified their economies will perform better than those that have  not. 

Some countries, including Morocco, Senegal, Cote d'Ivoire and several in East Africa, will weather the downturn better than their neighbors and will use current economic conditions as an opportunity to prepare effectively for future price shocks. 

Impact of China's Economic Slow Down on African Economies

The Institute for Security Studies (ISS) published on 7 January 2016 an analysis titled "New Year Crash in Chinese Stock Market Is a Bad Omen for Africa" by Peter Fabricius, ISS consultant.  The analysis focuses on the fall in commodity prices, to which China among others has contributed, and notes the IMF has cut its 2015 forecast for growth in sub-Saharan Africa from 4.5 percent to 3.75 percent. 

Why Africa Needs to Become More Like China

The World Economic Forum published on 9 June 2015 a commentary titled "Why Africa Needs to Become More Like China" by Anders Borg, chair of the World Economic Forum's Global Financial System Initiative.

Borg argues that Africa cannot rely on commodity exports for its economic future and urges African countries borrow four lessons from China: let  market forces work in the agricultural sector, push currencies to an artificially low level, increase the savings rate, and be more open to technology.

Borg does not address issues such as governance, democratization, and human rights. 

Ethiopa's Compelling Rise: Lessons for Africa

The Johannesburg-based The Brenthurst Foundation published in April 2015 a study titled "Ethiopia's Compelling Rise: Lessons for Africa" by Christopher Clapham, Cambridge University, and Greg Mills, The Brenthurst Foundation.

The authors comment that over the last decade, Ethiopia has been the fastest growing economy in Africa.  The government has driven growth through a range of infrastructural investments supported by sound policy.  At the same time, Ethiopia's state-centric approach to development has exposed a number of shortcomings.  Its inability to create or attract a productive private sector able to translate major infrastructural investments into the basis for a dynamic modern economy could yet blunt it future prospects.  Nevertheless, Ethiopia has many of the ingredients for sustainable economic success, not least its clear ownership over its own development plans and processes.

East Africa Rising

Robert D. Kaplan, chief geopolitical analyst at Stratfor, a geopolitical intelligence firm, published a commentary on 24 July 2014 titled "East Africa Rising."  He concluded, too enthusiastically in my opinion, that economic change is so vibrant from Mozambique to Ethiopia that the region may be in the process of becoming a critical nodal point of the dynamic Indian Ocean world. 

Ethiopia and the World Trade Organization

An official in Ethiopia's Ministry of Trade announced on 10 July 2013 that Ethiopia expects to join the World Trade Organization (WTO) by 2015.  Ethiopia first applied in 2003 and reopened negotiations in 2011.  There have been several sticking points, including Ethiopia's unwillingness to permit international banking and to open up the telecommunications sector. 

BBC radio interviewed me on 15 July 2013 concerning Ethiopia's request to join the WTO.  While I emphasized that negotiations are continuing between Ethiopia and the WTO Working Party, I thought it unlikely the Ministry of Trade would make such an announcement unless there had been significant progress in resolving the concerns about Ethiopia's request for membership.

For additional background on this subject, see Reuters' 10 July 2013 "Ethiopia Expected to Join WTO in 2015: Ministry" by Aaron Maasho and the Financial Times' 10 July 2013 "Ethiopia: We Live in WTO Hope" by Rob Minto.  For an update on this topic, see Bloomberg's 15 July 2013 article titled "Ethiopia Plans to Make WTO Offer on Services by September" by William Davison. 

For a list of the 159 current members of the WTO, click "Members and Observers."

IMF Program Note on Djibouti

The International Monetary Fund (IMF) issued a short program update on Djibouti on 13 April 2012. The IMF said the macroeconomic environment for Djibouti remained mixed in 2011. Real GDP growth rose from 3.5 percent in 2010 to 4.5 percent in 2011, thanks to the recovery of transshipment activity and transit trade with Ethiopia. The current account deficit deteriorated from 5.8 percent of GDP in 2010 to 12.6 percent of GDP in 2011. Djibouti's economic outlook for 2012 is relatively favorable. Real GDP is expected to grow at a rate of about 4.8 percent, buoyed by port activity, trade with Ethiopia, construction and foreign direct investment.

Click here to read the report.

Ethiopia: Fertility Rates, Livestock, and GDP Growth

The International Food Policy Research Institute (IFPRI) recently published three technical reports on Ethiopia. IFPRI, which has its headquarters in Washington, seeks sustainable solutions for ending hunger and poverty. IFPRI is one of 15 centers supported by the Consultative Group on International Agricultural Research, an alliance of 64 governments, private foundations and international and regional organizations. It also has an office in Addis Ababa.

The first study by Fanaye Tadesse and Derek Headey is dated January 2012 and titled Urbanization and Fertility Rates in Ethiopia. Ethiopia has one of the highest fertility rates in the world, although there are marked differences between rural and urban fertility rates. The paper explores the drivers of rural and urban fertility rates, including systematic tests of differences in key determinants. The paper projects the fertility rates into the future based on alternative urbanization, economic growth and education scenarios. It then links these alternative projections with existing estimates of the benefits of fertility reduction on economic growth, nutrition and poverty reduction.

The second study by Ayele Gelan, Ermias Engida, A. Stefano Caria and Joseph Karugia is dated January 2012 and titled Integrating Livestock in the CAADP Framework: Policy Analysis Using a Dynamic Computable General Equilibrium Model for Ethiopia. The paper is a highly technical analysis of the livestock sector in Ethiopia.

The third item is a short analysis dated November 2011 and titled Ethiopia's Growth and Transformation Plan: A Computable General Equilibrium Analysis of Alternative Financing Options by Ermias Engida and others. It reports that Ethiopia's annual average GDP growth for the period between 2005/2006 and 2009/2010 was 11 percent. The average annual growth rate in the agricultural sector was 8.4 percent and in the service sector 14.6 percent.