EAST AFRICA REGIONAL OVERVIEW by Axel fischer Monaco resources mrg world bank report analysis
East Africa maintains its lead in regional growth estimates of 5.3% in 2016, down from 6.5% in 2015. North Africa recorded the second-best growth performance in 2016 at 3.0%, buoyed by recovery in Egypt of 4.3% and Algeria of 3.5%.
Persistent political uncertainties and reduced oil production in Libya, however, continue to drag down growth in North Africa. Southern Africa recorded the third-best performance regionally with growth of 1.1%, down from 1.9% in 2015. Central and West Africa, on the other hand, recorded the worst growth performance at 0.8% and 0.4%, respectively. Central African growth was slowed by the poor performance of Equatorial Guinea (estimated at -8.2% in 2016 and -8.3% in 2015), the Republic of the Congo (which declined to 2.5% in 2016, down from 6.9% in 2015) and Chad (estimated at -3.4% in 2016, down from 1.8% in 2015).
West Africa, on the other hand, was dragged down by the economic recession in Nigeria, with economic growth contracting to -1.5% in 2016, down from 2.8% in 2015.
THE BANK’S ONGOING PORTFOLIO IN EAST AFRICA…
Approvals from the Bank Group’s entities totaled UA 1,202 million (about 68 percent of total approvals) for non-sovereign operations at regional and national levels in sectors including finance, transport, and energy.
The facilities included equity participation, lines of credit, partial credit guarantees, and two senior loans (for the Achwa 2 Hydropower Project in Uganda and for Ethiopian Airlines). The energy project in Uganda will provide reliable, low cost, and sustainable base-load power, addressing current shortfallsADB approvals increased 120 percent from UA 545 million in 2015, reflecting the Bank’s drive to expand its business in Eastern Africa, now host to some high-profile projects.
With the private sector as the engine of growth in Eastern Africa, Bank activities emphasized improving the business and investment climate to support the sector’s development in 2016. The Bank approved UA 545 million (31 percent of total approvals) for non-sovereign operations at regional and national levels in sectors including finance, transport, and energy.
The facilities included equity participation, lines of credit, partial credit guarantees, and two senior loans (for the Achwa 2 Hydropower Project in Uganda and for Ethiopian Airlines). The energy project in Uganda will provide reliable, low cost, and sustainable base-load power, addressing current shortfalls. The Bank’s lines of credit helped established firms to expand and commercial banks increase their lending to SMEs.
A US$ 4 million partial credit guarantee to the Tanzanian Mortgage Refinance Company—a non-bank financial institution with the sole purpose of expanding Tanzania’s mortgage market and thus supporting debut bond issuance—is expected to create jobs and generate better access to affordable housing.
