GIGA scholars contributed to the African Economic Outlook 2016.
2015 has been a challenging year for much of Africa. Average growth of African economies weakened slightly in 2015 to 3.6% (down from annual 5% enjoyed since 2000). Total financial flows have decreased 12.8% to USD 188.8 billion (using UNCTAD rather than IMF estimates for FDI). Africa´s tax-GDP ratio tumbled to 17.9%, down from 18.7% in 2014. China´s slowdown produced rough headwinds for Africa where the gravity of growth is shifting from the resource rich West to the East.
The slowing of output growth in major emerging economies has been associated with lower commodity prices. Next to supply factors, the marked decline in investment and (rebalanced) growth in China is depressing commodity prices, particularly in metals and energy. Three key factors have underpinned Africa’s good economic performance since the turn of the century: high commodity prices, high external financial flows, and improved policies and institutions. Macroeconomic headwinds for Africa’s net commodity exporters may imply that Africa’s second pillar of past performance – external financial inflows – will suffer as well.
About the African Economic Outlook 2016: The African Economic Outlook (AEO) is produced annually by the African Development Bank (AfDB), the Organisation for Economic Co-operation and Development (OECD) Development Centre and the United Nations Development Programme (UNDP).