Brexit tensions, elections cause of Africa’s slow growth - banker
Gaborone, Botswana (PANA) - The Chief Executive Officer of the First National Bank Botswana (FNBB), Steven Bogatsho, Thursday attributed the slow growth of Africa’s economies to Brxit tensions and elections.
Bogatsho said this here when he briefed the press on FNBB’s unaudited accounts and financial reports for the six months ending 31 Dec 2018.
The CEO said growth in sub-Saharan Africa (SSA) was expected to rise to 3.8 percent and 3.9 percent in 2019 and 2020 respectively, from 3.0 percent in 2018 (IMF forecasts) on the back of a slight improvement in commodity prices and higher investment spending.
East Africa, he said, would be the major regional growth driver, as infrastructure investment and Foreign Direct Investment (FDI) into the up and coming oil and gas industry increased over the coming years.
“Bigger markets such as Nigeria and South Africa continue to be a handbrake for SSA growth, as their own expansion rates remain well below their long-term averages.
“However, commodity prices are dependent on global economic stability. Additionally, the upcoming elections in Ghana, Mozambique, Nigeria, South Africa and Tanzania reduce the likelihood of those governments reining in expenditure, which could negatively impact inflation in the short term,” said Bogatsho.
He said they had witnessed most economies adopting a more hawkish tone towards the end of 2018 on the back of rising inflationary pressures and the trend should continue in 2019.
He said, with that, those countries that had been easing in 2018 were likely to cut further (Mozambique and Ghana), while others were expected to start hiking (Zambia and Nigeria).
Countries like Botswana, Kenya and Tanzania are expected to keep their stance unchanged; with inflation set to remain within the target range of these central banks.
Bogatsho said inflation outlook for South Africa had improved, limiting any potential hike of 25 basis points (bps) in 2019.
-0- PANA MS/RA 28Feb2019
