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CAIRO – 13 September 2017: Africa’s economic growth declined to stand at 1.7 percent in 2016, down from 3.7 percent in 2015, the United Nations Economic Commission for Africa said in a report Wednesday.
The report ascribed the drop to a decline in commodity prices since 2014, in addition to the affect of the slowdown of the Chinese economy and the higher global interest rates, which weighted on the ability of African countries to take external debts.
Moreover, the negative impact of the environment on the agricultural production in Morocco, Algeria and Malawi as well as a lack of political and security stability in central Africa’s countries have also contributed to the decrease in growth.
The commission believes in the importance of transforming African countries from an economy based on agriculture to a diversified one, in which industry plays a vital role, Chief of the Forecasting Section of Macroeconomic Policy Division at the Commission Khaled A. Hussein said.
Hussein said, during a press conference Wednesday to launch the economic report on Africa 2017, that the African economy growth saw a decline after a good performance in 2015.
He stated that the drop reflected weakening economic conditions in Africa’s largest economies, such as Nigeria with -1.6 percent, South Africa (0.6%) and Egypt (3.4%).
The report said that North Africa witnessed a decline in growth to stand at 2.6 percent in 2016, driven by slower growth in Algeria, Egypt and Morocco.
“Low oil prices weighed on public investment and private consumption in Algeria; Egypt was hurt by tourism’s weaker performance and a consequent decline in foreign currency earnings; and Morocco was affected by drought which hit agriculture, crimping private consumption and government spending,” the report read.
The balance of payments’ deficit widened to seven percent, which drove the countries to debts. The African economy is expected to grow 3.6 percent during 2017, as a result of weakened economic conditions of some mega countries.
The report recommended the importance of implementing the structural transformation towards manufacturing and fast regional merger through the continental free trade agreement.