Africa > Southern Africa > Botswana > Africa’s economic growth is likely to be slower in the intervening years

Botswana: Africa’s economic growth is likely to be slower in the intervening years

2016/05/12

Africa’s economic increase is likely to be slower in the intervening years than in the before decade, according to the new rating by Ernst & Young using a barometer to gauge the level of appeal and success.“The baseline projection of the International Monetary Fund (IMF) for 2016 is presently reduced to 3%, while it was estimated at 6.1% in April 2015″, Ernst & Young points out in its rating.

According to the international audit firm, the major reasons behind the relative slowdown are not specific to Africa given that they are the same factors affecting the world economy.


This situation is blamed on a general economic slowdown in emerging markets and, particularly, the rebalancing of the Chinese economy, continued stagnation in most developed economies, falling commodity prices and rising costs of borrowings.

“However, although the increase in the region is relatively slow, two-thirds of sub-Saharan African economies still growing at rates surpassing the world average, and the region will remain in second position in terms of the speed of progression globally in the near next, behind emerging Asia,Ernst & Young indicates.

According to the firm, this is as well corroborated by the gradual increase in the number of foreign direct investment projects (FDI) in Africa in 2015, an increase occurring at a time at the same time as the total number of FDIs plummeted by about 5 % across the world.

“In terms of investments, the next few years could be difficult, not because of the lack of opportunities, but due to the fact that these opportunities are likely to be additional unequal than they have ever been” Sugan Palanee, chief of the African market department at Ernst & Young firm opines.

He believes it was presently additional significant than ever for companies and investors, which sometimes put strong emphasis on the development of short-term economic increase, to adopt a factual and granular approach to assess the business and investment opportunities in the long term.

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