Africa Economic Forecast

The African continent is characterised by numerous institutional and infrastructural weaknesses that has hindered strong economic growth in the past. Nevertheless, the region contains a great deal of promise with many of its countries forecasted to be among the fastest growing economies in the world.

The African continent is characterised by numerous institutional and infrastructural weaknesses that has hindered strong economic growth in the past. Nevertheless, the region contains a great deal of promise with many of its countries forecasted to be among the fastest growing economies in the world.

In 2010, the average GDP growth rate (constant prices, national currency) for Africa was 4.62 percent. For the same year, the weighted average GDP growth rate (constant prices, national currency) was 5.18 percent. The fastest growing economy in Africa for 2010 was the Republic of Congo, which had a GDP growth rate (constant prices, national currency) of 9.09 percent.

In 2011, Ghana is expected to be the second fastest growing economy in the world with a GDP growth rate (constant prices, national currency) of 13.669 percent. Ethiopia will also be among the top ten fast growing economies in the world with a GDP growth rate of 8.539 percent. 

However, the biggest challenge for most African countries will be on how to sustain their economic growth and continue supporting their economy through infrastructure and policy development.

Africa GDP Forecast

Africa’s GDP (Current Prices, US Dollars) and GDP (PPP) in 2010 was US$1.909 trillion and US$3.36 trillion respectively. Alarge percentage of these figures are derived from the larger African economies, such as South Africa and Egypt. In 2010, South Africa and Egypt contributed to 15.6 percent and 14.8 percent of Africa’s total GDP (PPP).

Africa’s poorer countries, on the otherhand, contribute less than 0.01 percent each to the continent’s GDP (PPP). Sao Tome and Principe, for example, is responsible for only 0.009 percent to Africa’s GDP – with a GDP (PPP) of US$311 million

From 2012 to 2016, Africa’s GDP (PPP) for Africa will grow by an average of 7 percent annualy. By 2016, the continent’s GDP (PPP) will be US$4.88 trillion, an overall growth of 45.5 percent over 5 years.

Africa’s GDP (PPP) per capita is expected to see similar growth figures from 2011 to 2016. In 2010, GDP (PPP) per capita was US$3,355. By 2016, Africa’s GDP (PPP) per capita is expected to reach US$4,188, a 24.8 percent increase from its 2010 figure.

Africa Unemployment Forecast

By end-2011/early-2012, Africa will have more than 1 billion inhabitants. Historically, one of the challenges that the continent has faced has been high birth rates, though recent studies show that the birth rate has been slowly declining down. However, mortality rates in the continent remains high, particularly with the onset of diseases, civil conflicts, famine, starvation and relatively poor social conditions across the continent.

Unemployment rates across Africa are also extremely high, with many African countries believed to have severe unemployment or underemployment issues. Due to the severity of the unemployment issue in many African countries, few countries have any official data on unemployment in their country. The IMF has available unemployment data for the following African countries: South Africa, Sudan, Sao Tome and Principe, Algeria, Morocco, Nigeria and Seychelles. In 2011, these countries had an average unemployment rate of 11.6 percent, with South Africa having the highest rate of 24.8 percent and Nigeria the lowest with 4.5 percent. However, unofficial numbers have put unemployments for countries such as Zimbabwe at over 90 percent.

As further foreign investment is centred towards the continent, unemployment figures are expected to fall significantly. However, education and job creation remains vital component towards addressing the current situation.

Africa Inflation Rate & Current Account Balance Forecast

Similar to its unemployment rates, official inflation rate figures in Africa are extremely hard to get, particularly in countries with hyper-inflation. The Zimbabwe economy for instance went through a period whereby the inflation rate had risen by more than 10 million percent, though the currency has since been abandoned for foreign currencies such as the US Dollar or the South African Rand for transactions. The following is a list of countries where official inflation rate date is available for the IMF. These countries are Congo, Sierra Leone, Guinea, Angola, Nigeria, Sudan, Mozambique, Egypt, Ghana, Uganda, Madagascar, Zambia, Botswana, Malawi, Burundi, Mauritana, Gambia, Republic of Congo, Swaziland, Algeria, South Africa, Djibouti, Rwanda, Cape Verde, Benin, Central African Republic, Ivory Coast, Cameroon, Senegal, Guinea Bissau, Morocco, Chad, Niger, Gabon, Burkina Faso and Seychelles.

Among these African nations, the average inflation rate (average consumer price change) in 2010 was 6.35 percent. Congo had the highest inflation rate in Africa at 23.464 percent, with Sierra Leone, Guinea, Angola, Sao Tome and Principe, Nigeria, Sudan and Eritrea being among the top ten highest inflation rates in the world. On the other end of the spectrum, countries such as Seychelles experienced deflation in 2010.

According ot data from the African Economic Outlook, Africa´s average inflation rate, will increase marginally in 2011 before sliding back again in 2012. The main reason for the rise of inflation rates in 2011 is the increase in energy and food prices. In the near future, most African countries will be likely to report lower inflation rates, though some countries such as Ethiopia, Sudan, Egypt and Angola will still see inflation rates above the 10 percent mark.

The combined current account balance for Africa in 2010 was US$32.88 billion. More than half of the African nations recorded current account deficits in 2010 though high surpluses in countries such as Algeria (US$15.104 billion), Nigeria (US$13.886 billion), Libya (US$11.89 billion) helped to boost the continent’s current account balance. The largest current account deficit came from South Africa at -US$10.117 billion.

By 2016, Sub Saharan African countries will experience a current account deficit of US$9.72 billion, though more countries in the region will record current account surpluses. Algeria (US$33.12 billion) and Nigeria (US$35.99 billion) will have the highest current account balances in Africa by 2016.