African Agriculture Economies 'Bright Spot' in Disappointing Global Economy

The global economy generally fell short of its forecasts, set to weaken to 2.6 percent this year, but in Sub-Saharan Africa, agriculture-dependent countries such as Benin, Rwanda, Cote d'Ivoire, and Uganda grew positively, according to the latest World Bank report.

"The bright spots are really the non-resource-intensive countries, the ones where agriculture production has been solid for a few years now and where public investment has had growth," said Franziska Ohnsorge, lead economist and head author of the World Bank report, titled "Global Economic Prospects: Heightened Tensions, Subdued Investment".

Part of the positivity is a combination of good harvests and good policies, Ohnsorge told RFI.

"This group of fairly agricultural commodities... can support public investment programmes which are much needed for infrastructure, to build the foundations for future growth," she said.

Not only good harvests, but good weather was key as well. For countries in the path of deadly Cyclone Idai and Cyclone Kenneth in April, lives were lost and harvests ruined. Comoros, Mozambique, Malawi and Zimbabwe had a number of economic losses, not only in agriculture.

Growth in emerging markets and developing countries, such as in the Sub-Saharan African region is expected to fall to a four-year low of 4 percent this year before rebounding to 4.6 percent in 2020, according to the report.

Power outages, unemployment equal poor showing

While Sub-Saharan Africa as a region fell short of the forecast, the top economies suffered for vastly different reasons. In Nigeria, in both the oil and non-oil sector, the business environment and high unemployment is a challenge, said Ohnsorge.

For South Africa, it was a combination of policy and electricity.

"The rolling power outages have weighed on industrial activity and it looks like it will take a few months to resolve those - that will weigh on growth this year and next year," said Ohnsorge.

"The reforms underway there have yet to bear fruit in terms of much stronger growth," she said, referring to good governance and fiscal policy reforms that President Cyril Ramaphosa has promised but struggled to implement.

South Sudan, the region's fourth largest economy and a major oil producer, continues to struggle through crisis.

"A year ago we had expected growth in the order of 5.5 percent, and now it is minus 1.9 percent," said Ohnsorge. "It's really a reflection of the fuel and food shortages that have been persistent as a reflection of political tensions," she said.

The report indicated that in other countries like Liberia and Zambia, growth was subdued, as high inflation and elevated debt levels continued to weigh on investor sentiment.

Deceleration outside the region

Major trading partners outside the sub-Saharan African region, including China, the United States and the eurozone are expected to decelerate in 2020, with lower than expected commodity prices.

The eurozone and China are suffering from a pronounced global trade weakness, says Ohnsorge, which could make the Sub-Saharan African region vulnerable in terms of trade.

"China accounts for a quarter of global agricultural demands and almost half of global metals demand, so any slowdown in China is likely to affect the commodities exporters, metals and agricultural commodities, in particular," she said.

And while growth is projected for the region, it will not be able to significantly reduce poverty, according to the report.

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