How can Africa manage the commodity slump and attract investment?

by Developed Africa 21. January 2017 21:40

 

American research group The Brookings Institution has just published its annual Foresight Africa project - a series of reports, commentaries and events aimed at helping policymakers and speculators stay ahead of developments impacting the continent.

Mobilising financial resources

• By early 2016, oil exporters’ current account surpluses had breached a 10-year low. The price of the commodity fell from $112 per barrel in mid-2014 to less than $39 in early January 2016. In 2017, policymakers will continue to face gloomy prospects.
• Ghana’s growth rate is projected to rise substantially in 2017 following the opening of a new oil field. This may increase the country’s output by almost 50 percent.
• Côte d’Ivoire, Ethiopia, Senegal, and Tanzania are expected to remain within the top five African countries with the highest growth rates in 2016 and 2017, based on current estimates.
• Many social challenges that were once exclusively the domain of government budgets and aid groups can today be tackled with help from business
• Enhancing agricultural productivity is not an outdated concept. Higher productivity would raise the income of farmers and free up resources for other economic sectors.
• Fiscally vulnerable commodity-rich countries could reduce fiscal deficit by reducing government spending and increasing efficiency in 2017. They could also increase tax rates.
• Countries like Nigeria and Angola could quickly mobilise revenues from non-commodity-related activities by increasing their VAT rates with relatively small side effects on economic activity.
• Event to watch: The African Development Bank Group’s 2017 annual meetings – May 22-26, 2017

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