Snap shot on Africa economy

Despite a slow start this year, Sub-Saharan Africa economies have for the most part weathered the worst of the global financial crisis.The Nigerian Government  upgraded its estimate for GDP growth rate for Q2 from an initial 5.9% to 7.2%. This growth is supported by a recovery of the oil prices that rose from a low of US$40 a barrel in Q1 to an average of US$60 a barrel in Q2.

In Mauritius, GDP growth rate for Q1 2009 averaged 2.7% year-on year. The Mauritian Central Statistics Office expects overall GDP for 2009 to register a 2.8% growth up from a previous forecast of 2.7%. South Africa and Botswana experienced negative growth in Q1 2009,with their external sectors deeply imparted by the global slowdown.In Botswana,the Central Statistics Office reported that real GDP declined by 20.3% in the Q1 2009 compared to Q2 2008 resulting from weakness in the diamond mining sector which experienced production cut due to weak demand. On a positive note,the economy grew by 20.4% during Q2 2009.

Currencies in a number of Sub-Saharan Africa countries gained in during the quarter. This was partly attributed to the recent weakness of the US Dollar and also due to the rebound in commodity prices.The Copper prices gained by over 118% and this contributed to positive sentiment on the Zambian Kwacha as concerns of a widening current account deficit weer averted.

Inflation has been trending downwards across, the Sub-Saharan Africa region. In Botswana, consumer inflation rate for August dropped to 6.0% from 7.0% in June.Interestingly, in a bid to stimulate credit expansion and consumer spending the Bank of Botswana has over  the year lowered its bank rate by 400 basis points.Inflation in Ghana has over the recent past remained sticky above the 20% levels.However, recently released figures by the Bank of Ghana indicate the inflation has subsided  to 19.7%.

With the exception of Zambian and Mauritian stock markets, which are up by 12% and 40% year to date, most Sub-Saharan Africa stock indices are still posting negative performances. While most African markets were affected by the global financial markets meltdown in Q4 2008,it is encouraging to note that investor sentiment is gradually improving.


NB: Xmas gift from  friend,Edward Gitahi Investment Manager AIG.




When i not thinking future enterprises,i am sleeping the future of our children,eating soccer,walking the talk and of course, fun....!