Sub-Saharan GDP Growth Rate To Stagnate at 2.60% As Ethiopia Overtakes Kenya
By Juma / Published October 11, 2017 | 9:22 am
The International Monetary Fund (IMF) has projected that the total GDP growth of the Sub-saharan region will remain unchanged at 2.60 percent in 2017 and 2018.
In its World Economic Outlook (WEO) report, the global institutions slightly revised upwards the global economic growth rate to 3.6 percent and 3.7 percent in 2017 and 2018 respectively.
In the report, most economies around the globe, both developed and developing, are registering a weakened growth in their economies with most of them being affected by below-target inflation.
In Sub-Saharan Africa, Angola has emerged as the leading economy and developing the market with its growth in 2017 being put at 1.5 and projected to grow at 1.6 points in 2018.
According to the report, the top ten vibrant and emerging markets and developing economies include Angola, Benin, Botswana, Burkina Faso, Burundi, Cabo Verde, Cameroon, Central African Republic and Chad.
What is more interesting from the report is that Kenya is slowly falling from her East African Economic Powerhouse throne with the position now being assumed by Ethiopia.
Read: Treasury downgrades 2017 economic outlook 5.1pc from 5.9pc
In East Africa, Ethiopia is the leading emerging market and developing the economy with her growth being placed at 8.5 in 2017 and projected to grow at the same point in 2018.
Ethiopia overtook Kenya in the month of May, with the World Bank saying that the country had opened a gap of 29 million US Dollars over Kenya. The World Bank further predicted that Ethiopia’s economy will be the most expansive on the continent in 2017.
Kenya has been moved to the second position after Ethiopia with 5.8 points with a projection of 5.0 in 2018. Kenya’s 2017 growth rate was also revised downwards by 30bps to 5.0 percent which in economic analysts view, Genghis Capital Investment Bank, has been guided by:
Protracted electioneering period which has delayed public gross fixed capital formation, Slowdown in private sector credit growth Knock-on effect on the drought that was marked in 4Q16 and 1Q17.
Rwanda is at position three, followed by Tanzania and Uganda as shown in the image below:
The political situation in Kenya has continued having its toll on the stock market at the NSE with activities slowing down further with deals closed centred on the 10-year tenors.
The medium-term was quiet with weak demand at 12.50 percent levels and above. Secondary market executions fell on the NSE to 775 million shillings with 60 percent of the turnover on the long-end of the yield curve.
Demand on the long-end remains strong above the resistance level of 13 percent, but with a widening bid/ask spread, while the limited supply available has moved to 12.90 percent levels and below.
The regulator came in yesterday to fund the market through reverse repos offering 7 billion shillings and receiving only 350 million shillings in bids which they picked at 10.05 percent. It is curious that they participated in the market yesterday for a higher amount than on Monday’s session, despite a falling overnight lending rate which has been coming off to levels below 8 percent.
More Articles From This Author