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Southern Africa Regional Overview

Regional Overview

Economic growth in the region declined to 1.1 percent (from 1.9 percent in 2015), and remained weak across most countries. Madagascar and Mozambique were rare bright spots, posting growth rates above 4 percent, despite a dip in the growth rate in Mozambique (6.6 percent in 2015). Botswana was back on track with real GDP growth of 2.9 percent, after contracting by 0.3 percent in 2015. The region’s dismal economic performance is due mainly to near-zero growth in South Africa (0.4 percent) and lower growth in Angola (1.1 percent compared to 3.0 percent in 2015), two major commodity exporters hit by drought, persistent power outages, and adverse terms-of-trade shocks.

The Bank’s Ongoing Portfolio in South Africa

The Bank’s total commitment to Southern Africa at end-2016 was UA 7.32 billion, representing 22 percent of the Bank’s total commitments to RMCs. With 35.2 percent of total approvals, the energy sector dominates the portfolio, followed by finance (23 percent) and transport (18.7 percent).

Total approvals in 2016 came to UA 507.3 million, mainly for finance (27.3 percent), agriculture (21.6 percent), and water and sanitation (20.0 percent). The largest operations approved in 2016 include lines of credit to the Development Bank of Namibia (UA 240 million) and the Botswana Development Corporation (UA 55.6 million), ADF loans for the Integrated Small Towns Water Supply and Sanitation Program in Zambia (UA 98.5 million), the Mueda–Negomano Road Project, Phase I in Mozambique (UA 53.5 million), and the Lower Usuthu Smallholder Irrigation Project II, Phase II in Swaziland (UA 42.6 million).

The Bank’s support to the Regional Economic communities (RECs) focused on capacity building and support for regional infrastructure projects implemented by the RECs on behalf of member countries. In 2016, the Bank approved two Regional Institutional Support Projects aimed at building capacity in public financial management. For regional infrastructure, in the Southern African Development Community (SADC), the Bank supported regional development finance institutions, social sector projects, and transport projects, including the Multinational Nacala project in Malawi, Mozambique, and Zambia. The Bank has also financed SADC water and sanitation projects and, in January 2016, provided financial support to the SADC Secretariat to design the SADC Regional Development Fund.

An ADF co-financed local economic development project in Malawi, aimed at contributing to pro-poor growth and poverty reduction in four districts, was completed in 2016, with some notable achievements.