by Chrispinus Omar
NAIROBI (Xinhua) -- Economic growth in
East Africa remains strong despite the adverse effects of severe
drought across the region, said a report by an accountancy and
finance body released on Thursday.
The latest report by
the Institute of Chartered Accountants in England and Wales (ICAEW)
said the economic is being proposed by infrastructure growth
across the region.
"Infrastructure development continues to stimulate industry
across the region, while expanding services to the largely
un-serviced markets remains the key driver behind growth," said
Michael Armstrong, Regional Director of ICAEW Middle East,
Africa and South Asia.
The report "Economic Insight: Africa Q1 2017" pointed out
that authorities from various East African nations have
attempted to mitigate the effects of the drought by stimulating
economic activity through other channels such as substantial
fiscal stimulus and loosened monetary policy.
According to the report, Tanzania is set to hit a real GDP
growth of 6.9, followed by Uganda at 6.8, Ethiopia at 6.7, and
Rwanda and Kenya at 6.6 and 6.4 despite the drought.
It said both Rwanda and Uganda have loosened monetary policy
during the first quarter of the year, while Ethiopia
counterweighed the drought effects through substantial fiscal
stimulus—the construction sector reportedly expanding by 25
percent during the 2015/16 fiscal year.
ICAEW said the adverse effects of the drought have been most
notable in Uganda, with agriculture decreasing during the first
three quarters of 2016.
It notes that poor crop production has also had a marked
impact on food price inflation across the region.
"While not particularly intense in historic terms,
inflationary pressures in recent months can almost entirely be
attributed to high food prices, with non-food price inflation
remaining subdued," the report said.
Agriculture in most East African nations is highly dependent
on the weather, and adverse rainfall is directly reflected in
both agricultural production and food prices.
The report, commissioned by ICAEW and produced by partner and
forecaster Oxford Economics, focuses specifically on Kenya,
Tanzania, Ethiopia, Nigeria, Ghana, Cote d’Ivoire, South Africa
Meanwhile, the report said Botswana and South Africa are
still struggling to gain traction due to the slump in commodity
prices as well as the drought. Real GDP growth of 1.2 percent is
forecast for both these countries in 2017.
According to ICAEW, South Africa’s growth will be supported
by widespread rains an improved outlook for consumer demand and
a recovery in commodity prices, while Angola remains optimistic
of improved oil production and the commencement of
Botswana on the other hand, is forecast to record growth of
4.1 percent due to demand in the international diamond market.
ICAEW said Senegal’s strong growth in its primary and
secondary sectors as well as the government’s collaborative
efforts to improve infrastructure, particularly in electricity
supply, has tremendously stimulated the country’s economic
Study calls for tailored
decisions for agriculture expansion in Africa
SAN FRANCISCO United States (Xinhua)
-- A new study calls for policymakers
tailor decisions regarding deforestation around Africa’s unique
dynamics and uncertainties while the region expands production
of in-demand commodity crops such as cocoa, soy and oil palm, at
the cost of tropical forests.
Published in Environmental Research Letters, the study
provides the first comprehensive assessment of how international
demand for commodity crops is affecting sub-Saharan Africa’s
tropical forests, second in size only to the Amazon in South
America and almost 30 percent of the world’s total.
Since 2015, agricultural production in the region has grown
at the fastest rate globally, and cropland is predicted to
expand more than 10 percent by 2025.
With its abundant cheap land and labor, sub-Saharan Africa
would seem an obvious next step for multinational companies
looking to expand farther, as integrated production of in-demand
crops has moved away from areas where land is scarce and where
natural resource regulations are robust, and moved to tropical
regions such as Southeast Asia and South America, where Brazil
and Indonesia alone accounted for more than 60 percent of global
tropical deforestation from 2000 to 2005.
Although deforestation rates in Africa remain well below
those in South America and Southeast Asia, the region has lost
an area of intact forest about the size of Iceland since 2000.
Africa’s forests, contained primarily in the Congo Basin, are
an important source of local income.
In addition to regulating climate, safeguarding water quality
and controlling disease, the forests feed and provide
subsistence means to at least 100 million people living nearby.
Forest products such as logs generate an average of 6 percent
of sub-Saharan Africa’s gross domestic product, triple the world
"We are starting to better understand issues related to
large-scale agricultural expansion in the tropics," said lead
author Elsa Ordway, a graduate student in the Stanford
University School of Earth, Energy and Environmental Sciences.
"In Africa, we have the opportunity to take lessons learned
from other regions and recommend preventive policies."
Expansion of commodity crop production in sub-Saharan Africa
has so far been driven primarily by small- and medium-scale
local farmers who boost the regional economy and can expand with
less disruption to forests.
As multinational companies move in, they are more likely to
acquire land by clearing intact forest due to property conflicts
resulting from the region’s land tenure complexities.
These companies have bought up a land area larger than Costa
Rica in the Congo Basin, mostly for crops such as oil palm and
soy, in recent years.
The study’s authors suggest Africa could be spared the
massive deforestation that large-scale monoculture has wrought
on regions such as Southeast Asia by implementing policies that
prioritize forest conservation and local control of the land.
In particular, they recommend policies that would alleviate
poverty in local regions and incentivize forest conservation
rather than the widespread deforestation that has accompanied
agricultural expansion in other regions.
"Civil society, policymakers and private companies can
benefit from many years of trial-and-error with
anti-deforestation policies in South America and Southeast Asia
to design more effective interventions in sub-Saharan Africa,"
co-author Eric Lambin, a professor in the School of Earth,
Energy and Environmental Sciences, was quoted as saying in a new
release from Stanford.
Among the possible solutions: promoting investment that
ensures small and medium-scale farmers continue to drive
agricultural expansion in order to alleviate poverty and avoid
land tenure conflicts, encouraging shade cultivation of crops
such as cocoa to incentivize forest cover conservation, and
finding ways to engage African consumers on deforestation