Growth in Sub-Saharan Africa region is estimated to have slowed to 1.5 percent rate in 2016, it is the weakest pace in over two decades, as commodity market lowered the price and region struggled to adjust to it. Per capita basis, regions GDP shrunken by an estimated 1.1 percent. The greatest causers of the regions struggle is South Africa and oil exporters, which contributes two-thirds wealth to the region’s economy.
Growth is expected to pick up slightly to 2.9 percent in 2017, as Sub-Saharan region is still adjusting to lower commodity prices. In 2017 oil exporters will be weaker again, as countries that are not gaining resources from natural ways will remain in strong position. As a comparison large infrastructure investments will continue to support growth among countries with wide agricultural economy, as Côte d’Ivoire and Ethiopia growth is expected to be above 8 percent.
Sub-Saharan Africa is facing serious problems. Externally uncertain trade policies from US and Europe could lead commodity market to even more fragile position. It could lead to higher borrowing costs and cut off capital flows to the markets. Upcoming elections in France can become the most serious impact to the region’s growth. France’s Central Bank hold foreign exchange reserves of 14 African economies and is considered to be a key figure for political stability and counterterrorism in Sub-Saharan Region. Large part of French business groups has good relations in the region. Main economic activities is: mining iron and oil export. First round of French elections will take place on 23rd April, and it is almost certain that no candidate will win a majority, final election between two front runners will be held on 7th of May. There are two main opponents in upcoming elections Marine Le Pen of the National Party and Emanuel Macron, an independent candidate. As French government has very strong relations with their colonies for decades, the new French government’s foreign policy will have a significant impact on them. If Le Pen will come to power, the French National Party will change the relationship with Sub-Saharan Africa and lean towards francophone Africa. Other major factor in Sub-Saharan Africa is French security presence, which is huge, it plays a very significant role in managing civil disturbance and extremism. Current French government are fighting the Jihad’s from beginning of West Sahara desert towards to Sudan territory. Nevertheless, France have deployed troops for peacekeeping in various African Countries.
Other strong sections that France is involved is: aid and trade. Africa is the first on the list when the speech is leaning towards aid. France gives 55 percent of aid to Africa, which 41 of 5 percent goes to Sub-Saharan Africa. In this instance Le Pen’s argument is that aid which Sub-Saharan Africa receives, encourages migration flows to get larger. Le Pen is planning to divert the aid to more to the side towards francophone Africa’s development.
Although Sub-Saharan region should recover its economy in 2017/2018 by 2.8 percent GDP, the internal risks regarding the growth looks poor, security and humanitarian issues in some of the Sub-Saharan region, as well as failure to make better trade policies across the region could stop he growth. Also we cannot forget the external risk from upcoming France government elections that could disrupt free trade agreements and potential international trades.
Ricardo, A.Aceves. (2017) Economic Snapshot of Sub-Saharan Africa.
Available at: http://www.focus-economics.com/regions/sub-saharan-africa (Accessed: 12th April, 2017).
The World Bank (2017) Global Economic Prospects: Sub-Saharan Africa.
Available at: http://www.worldbank.org/en/region/afr/brief/global-economic-prospects-sub-saharan-africa (Accessed: 12th April, 2017).
World Bank Group (2017) Global Economic Prospects Weak Investment in Uncertain Times.
Available at: http://pubdocs.worldbank.org/en/712231481727549643/Global-Economic-Prospects-January-2017-Weak-investment-uncertain-times.pdf (Accessed: 12th April 2017).