SA's stagnant growth a drag on expansion in southern Africa - AfDB
PRETORIA – Gross Domestic Product in southern Africa is expected grow by around 2.2 percent in 2019 from 1.2 percent last year, the lowest pace of expansion on the continent, the African Development Bank said this week.
In its annual economic outlook the AfDB said southern Africa -- which includes Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, São Tome é Principe, Zambia and Zimbabwe -- was expected to lag other regions due to high inflation, rising government debt, and low commodity prices.
South Africa, which accounts for two-thirds of the GDP, was among the five slowest growing economies, expanding less than one percent in 2018. Madagascar by comparison was up five percent.
The AfDB said weak revenue collection and expenditure pressures in South Africa continued to widen the fiscal deficit more than expected, with a gross tax revenue shortfall of R48.2 billion.
Meanwhile, spending increased due to free higher education for poor students, poorly performing state-owned enterprises and the government's efforts to kick-start growth.
The report said confidence in the South African economy had also been low because of poor governance, high levels of corruption, skill mismatches, and issues surrounding land expropriation.
The projected growth of the country’s major trading partners including Brazil, India, and Russia and other African countries was expected to act as a tailwind to domestic growth.
But the expected decline in global demand, especially due to slowdowns in China, Japan, the European Union and the United States, could act as headwinds.
- African News Agency (ANA)