The International Monetary Fund (IMF) has warned that economic growth in sub-Saharan Africa is slowing sharply.
In its latest African Economic Outlook, entitled “Dealing with the Gathering Clouds”, the Fund said the poorest continent was likely to grow 3.75 percent this year and 4.25 percent next, a big drop from the years before and after the 2008/2009 financial crisis.
Next year, the report forecasts growth of 4.25%.
The reasons for the economic slowdown included a sharp decline in commodity prices and tough financing conditions in several countries, together with a slowdown in the Chinese economy, are the main reasons for the overall downturn, the IMF says.
“The strong growth momentum evident in the region in recent years has dissipated,” the report said. “With the possibility that the external environment might turn even less favourable, risks to this outlook remain on the downside.”
Hardest-hit have been sub-Sahara's eight oil exporters – led by top producers Nigeria and Angola – although others such as Botswana, Ghana, Zambia and South Africa were also suffering from weak minerals prices, power shortages and difficult financing conditions.
China is the region's largest trading partner and many African countries have benefited hugely from exporting raw materials to the country.
To counter the drag on growth the IMF urged the region to adopt realistic fiscal and monetary policies and address the high income and gender inequality. The policies could include allowing currency depreciation as a shock absorber, especially in commodity exporting economies, and “striking an appropriate balance between debt sustainability considerations and addressing development needs.
“Reducing inequality could deliver significant growth payoffs for the region," it said. "Income inequality appears to be markedly higher at all levels of income in the region than elsewhere, with gender inequality being just one of the factors driving that result.”
Oil exporters such as Nigeria and Angola are being hit particularly hard by the slump in the oil price, which has fallen by more than 50% since mid-2014 to less than $50 a barrel.
The Economic Fund has called on African governments to adopt policies to lessen the impact of this economic slowdown, such as allowing currency depreciation to help boost exports.
It also urges governments to address income inequalities that are particularly high in the region, as well as gender inequality.
Nevertheless, countries such as Côte d’Ivoire, Ethiopia and Mozambique are still expected to grow at least 7% this year and next.
The regional current account deficit is expected to widen to 5.7% from 4.7% in 2014, marking the largest deficit in more than three decades, the IMF said, warning that commodity prices could still fall further”.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.