Africa sinking?

We expect that African economic growth this year will fall far below even 2015’s very poor result. The weakness will be concentrated in the region’s largest economies, most of which are still adjusting to lower commodity prices. Sharp currency depreciations will keep inflation elevated in most countries. Some – including Nigeria, South Africa, and Angola – will be forced to tighten monetary and fiscal policy, even in the face of very weak domestic demand. Local disruptions will also weigh on growth in several major economies. Nigeria’s oil sector is being crippled by militant attacks, while droughts will depress growth in South Africa, Ethiopia, and Zambia. We expect that growth in Africa as a whole will fall to just 1.3% this year, the slowest rate in 24 years. The situation should improve a bit in 2017 as commodity prices rise and one-off disruptions ease. But growth will remain sluggish by historical standards, quashing hopes of a quick return to the rapid growth recorded between 2000 and 2014.