Africa & the Global Economy
Moderator: Ms. Uduak Amimo, Presenter, Citizen TV Kenya & Former BBC Presenter, Focus on Africa
- Hon. Pier Carlo Padoan, Minister of Finance, Italy
- Hon. Ngozi Okonjo-Iweala, Minister of Finance and Coordinating Minister for the Economy, Nigeria
- Gov. Zhou Xiaochuan, Governor, People’s Bank of China, People’s Republic of China
- Dr. Makhtar Diop, Vice President, Africa Region, The World Bank
- Ms. Anne Sipiläinen, Undersecretary of State (Development Cooperation and Development Policy), Ministry of Foreign Affairs, Finland
This High Level Event aims to debate key recent economic developments in Africa in the context of the ongoing global developments. Arguably, for Africa, the key scenarios to watch are the trends in the US, Eurozone, Japan, and the group of emerging markets.
Overall, the global economy experienced subdued growth for another year in 2013. Estimated global economic growth was 3.0 per cent in 2013 against 3.1per cent in the previous year. This was due to the continued protracted recession in Europe during the first three quarters of the year and slower growth in emerging market and developing economies. The global economy is forecast to an increase to 3.7 per cent in 2014 and 3.9 per cent in 2015. The United States of America had been estimated to have grown by a meagre pace of 1.9 per cent in 2013, significantly lower than the 2.8 per cent growth of 2012. In spite of extremely accommodative monetary policy that has mainly boosted equity prices, a number of factors contributed to the slowdown, including fiscal tightening and a series of political gridlocks over budgetary issues during the year. GDP is projected to increase 2.8 per cent and 3.0 per cent for 2014 and 2015, respectively.
In contrast to the global and US trends, in the Eurozone, GDP decelerated to -0.4 per cent in 2013 from -0.7 per cent in the previous year. Its GDP is projected to grow by 1.0 per cent and 1.4 per cent in 2014 and 2015, respectively. Growth in the zone remains weak due to a number of factors, including the drag of fiscal austerity programs; exceptionally low intra-regional demand; slow extra-regional demand; and tight lending conditions for some countries.
Japan has been estimated to have grown by 1.7per cent in 2013 from 1.4 per cent in 2012. The country’s GDP is forecast to remain unchanged at 1.7 per cent in 2014, reflecting the expected drag from the consumption tax, which may be moderated somewhat by temporary fiscal stimulus. Growth is projected to moderate to just 1.0 per cent in 2015. Growth in emerging market and developing economies fell from 4.9 per cent in 2012 to 4.7 in 2013. Their growth is forecast to increase to 5.1 per cent in 2014 and to 5.4 per cent in 2015. Downside risks include rising interest rates (and hence falling capital inflows) and projected weaker commodity prices.
For African economies, although economic growth dropped in 2013 to 3.7 per cent from 6.8 per cent in 2012, growth prospects remain relatively robust. GDP is projected to accelerate to 4.8 per cent in 2014 and 5.8 per cent in 2015. However, the continent remains very vulnerable to key external risks, including further weakening in emerging market economies, reversal of recovery in Europe, disorderly tapering, and sharper than projected declines in commodity prices.
In view of the above developments, what strategic policies and actions does Africa need to take right now to entrench the ongoing evolution of the continent as a global player?