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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 
East Africa remains fastest-growing in
Africa in coming years: UN report

ADDIS ABABA Ethiopia (Xinhua) -- Projecting Africa’s aggregate growth and domestic product (GDP) to grow at 3.5 percent in 2018, and 3.7 percent in 2019, a new UN report reiterates that East Africa remains fastest-growing sub-region on the continent.

The World Economic Situation and Prospects (WESP) report launched on Tuesday at the UN Economic Commission for Africa (UNECA) in Addis Ababa, Ethiopia, states that Africa is expected to see stronger growth in 2018 and 2019.

It calls for renewed efforts to decrease over-reliance on commodity revenues through economic diversification and structural transformation.

With GDP growth of 5.3 percent in 2017, the East African sub-region is expected to grow by about 6 percent in 2018 and 2019, says the report.

Briefing the press on the report, Khaled Hussein, Chief of Forecasting Section Macroeconomic Policy Division of the UNECA, said the growth in the sub-region is facilitated by large infrastructure investments and the expansion of domestic markets.

North Africa is projected to stabilize at 4.1 percent in 2018 and 2019, after reaching 4.8 percent in 2017, as a result of firmer commodity prices, further improvement in the security situation and continuing economic recovery in Europe.

West Africa will continue its growth recovery, from 2.4 percent in 2017 to 3.3 percent in 2018, as oil prices rise and oil production gradually increases in Nigeria, easing fiscal and foreign exchange pressures.

Several other west African countries, including Cote d’Ivoire, Ghana and Senegal, are expected to continue a path of strong growth supported by robust spending on infrastructure, higher investor confidence and improvements in the business climate.

The report projects growth in South Africa to improve but remain modest.

Following the growth of 1.2 percent in 2017, GDP in the Southern African sub-region is projected to expand by 2.3 percent in 2018 and 2.5 percent in 2019.

In South Africa, net exports will rebound with the moderate recovery in the agriculture and mining sectors. Growth will, however, remain relatively subdued amid heightened political uncertainty.

Buoyed by higher oil prices, growth in Central Africa is estimated to rebound from 0.7 percent in 2017 to 2.1 percent in 2018. Insecurity and relatively low commodity prices weigh on prospects for the area.

The report notes that several central banks in Africa decreased policy rates in 2017 amid moderately easing inflationary pressures.

As the impacts of large currency depreciations subside, inflation is projected to decrease in 2018-2019. However, inflation in many African countries remains high relative to the rest of the world.

Investments in human capital as well as efforts to strengthen governance and institutions are needed. Importantly, acute malnutrition in conflict-affected areas must be urgently addressed, emphasizes the report.

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EARLIER REPORTS:

East African body says food, drugs hard-hit by non-tariff barriers

NAIROBI (Xinhua) -- The apex body of business associations in the East African Community (EAC) on Wednesday said food, drugs and cosmetics are the most affected by non-tariff barriers in intra-EAC trade.

East African Business Council (EABC) Executive Director Lilian Awinja told Xinhua in Nairobi that trade barriers of most other products have been resolved and these goods are freely flowing across the EAC member states.

“The main reason why food, drugs and cosmetics face trade barriers at the EAC border points is due to lack of harmonized standards across the three sectors,” Awinja said during a media briefing.

EABC draws membership from private sector organizations in Kenya, Uganda, Tanzania, Rwanda and Burundi.

The regional body has already established an East African Private Sector Standards Platform that addresses trade barriers faced by suppliers in intra-regional trade that are caused by differences in technical regulations among EAC member states.

Awinja noted that while Kenya and Tanzania have foods standards bodies, Uganda is yet to fully operationalize its organization.

“This has resulted in different laws on food safety that have hampered intra-EAC trade,” she said.

The East African Legislative Assembly has already endorsed the EAC Standardization, Accreditation and Conformity Assessment (SACA) Bill that seeks to harmonize foods, drugs and cosmetics standards across the region.

The heads of states of the EAC partner countries are set to sign the bill so that it becomes law later this year.

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Sub-Saharan Africa growth to rise to 3.2 pct in 2018: report

ADDIS ABABA Ethiopia (Xinhua) -- Economic growth in sub-Saharan Africa is projected to rise to 3.2 percent in 2018 and to 3.5 percent in 2019, on the back of firming commodity prices and gradually strengthening domestic demand, according to the World Bank.

According to the latest Global Economic Prospects (GEP) report released by the bank, growth in the region is estimated to have rebounded to 2.4 percent in 2017, after slowing sharply to 1.3 percent in 2016.

The rise reflects a modest recovery in Angola, Nigeria, and South Africa, the region’s largest economies, supported by an improvement in commodity prices, favorable global financing conditions, and slowing inflation that helped to lift household demand, the report said.

However, growth was slightly weaker than expected, as the region is still experiencing negative per capita income growth, weak investment, and a decline in productivity growth, said the report.

Although oil producers in the region continue to deal with the effects of the earlier oil price collapse, growth rebounded moderately in metals-exporting countries, reflecting an uptick in mining output amid rising metals prices, while growth in non-resource-intensive countries, largely agricultural exporters, was broadly stable, supported by infrastructure investment and crop production, according to the report.

Although the growth is forecast to rise in the years 2018 and 2019, it will remain below pre-crisis averages, partly reflecting a struggle in larger economies to boost private investment.

South Africa is forecast to tick up to 1.1 percent growth in 2018 from 0.8 percent in 2017, and the recovery is expected to solidify, as improving business sentiment supports a modest rise in investment.

However, policy uncertainty is likely to remain and could slow needed structural reforms, warns the GEP.

Nigeria is anticipated to accelerate to a 2.5 percent rate this year from 1 percent growth in the year just ended. An upward revision to Nigeria’s forecast is based on expectation that oil production will continue to recover and that reforms will lift non-oil sector growth.

And growth in Angola is expected to increase to 1.6 percent in 2018, as a successful political transition improves the possibility of reforms that ameliorate the business environment.

Non-resource intensive countries are expected to expand at a solid pace, helped by robust investment growth. Cote d’Ivoire is forecast to expand by 7.2 percent in 2018; Senegal by 6.9 percent; Ethiopia by 8.2 percent; Tanzania by 6.8 percent; and Kenya by 5.5 percent as inflation eases, according to the report forecast.

However, given demographic and investment trends across the region over the longer term, structural reforms would be needed to boost potential growth over the next decade, according to the report.

It further warned that excessive external borrowing without forward-looking budget management could worsen debt dynamics and hurt growth in many countries. Protracted political and policy uncertainty could further hurt confidence and deter investment in some countries.

It said that rising government debt levels highlight the importance of fiscal adjustment to contain fiscal deficits and maintain financial stability. Structural policies, including education, health, labor market, governance, and business climate reforms, could help bolster potential growth.

           

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