http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.17Change: 0.03
R/$ = 11.07Change: 0.01
Au 1238.28 $/ozChange: -4.47
Pt 1258.00 $/ozChange: 3.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
Article   Comments   Other News   Research   Magazine  
 
 
Aug 10, 2012

Facing headwinds

Back
Africa|Development Bank|Industrial|Africa|Europe|North America|China|South Africa|Bank|Mthuli Ncube|Pravin Gordhan|North Africa|Sub-Saharan Africa
Africa|Industrial|Africa|||||
africa-company|development-bank|industrial|africa|europe|north-america|china|south-africa|bank|mthuli-ncube|pravin-gordhan|north-africa|subsaharan-africa
© Reuse this



Despite some recent strong performances on the domestic and international financial markets, the underlying reality of the global economy is one of fragility.

The latest individual to add his voice to the chorus of warnings, is African Development Bank (AfDB) chief economist Professor Mthuli Ncube.

He says Africa’s 2012 economic growth outlook is facing headwinds from a range of sources, not least the current crisis in Europe.

The bank currently expects continentwide growth of 4.5% in 2012, underpinned by a sub-Saharan Africa economic expansion of 5.3% – excluding slow-growing South Africa, the rate of growth in the rest of the subregion is estimated at 5.9% for the year.

But the outlook is highly sensitive to the economic fortunes or misfortunes of Europe, with Ncube indicating that a one per cent fall in the territory’s growth will shave 0.5% off African economic growth.

Lower European growth will be felt primarily through lower export earnings and a decrease in tourism-related earnings, especially in North Africa, which is still stabilising from the after effects of the ‘Arab Spring’.

But there is also a risk of lower financial inflows in the form of aid, investment and remittances, as well as the potential for “contagion effects” spreading to African banks.

Ncube is also concerned that China, which acted as a key shock absorber during the earlier phases of the global economic crisis, may not be in a position to offer such support this time around.

The slowdown in China poses a particular risk for African commodity exporters, as it could send a “negative signal” on commodity prices.

The AfDB has already revised lower its growth outlook for South Africa, Africa’s largest economy, from 3.2% earlier in the year to around 2.9%.

The revision is in line with downgrades reported recently by the South African Reserve Bank (from 2.9% to 2.7%) and the World Bank (from 3.1% to 2.5%).

Finance Minister Pravin Gordhan has also indicated that growth is likely to fall short of the 2.7% forecast by the National Treasury in February – he is due to offer an official update in the upcoming Medium Term Budget Policy Statement in October.

The World Bank warns that South Africa is vulnerable to both the slowing economies of Europe, which consumes many of its industrial exports, as well as to a slowdown in China, which consumes many of its commodities.

For Africa as a whole, Ncube also warns of other headwinds, including the potential for rising inflation, food price shocks in light of the drought conditions in North America and uncertainties surrounding the oil price outlook.

Nevertheless, he is convinced that several internal and external growth drivers remain intact and that African countries will continue to grow faster than the global average.

For the sake of all Africans, I hope he is right.

Edited by: Terence Creamer
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Editorial Insight News
In his concluding remarks during the release the latest World Economic Outlook (WEO), International Monetary Fund (IMF) chief economist Olivier Blanchard argued that the challenge for national policymakers was to “re-establish confidence, through a clear plan to deal...
If South Africa is going to attain the twin goals of reindustrialising while transforming the racially skewed composition of its economy, it is common cause that black economic-empowerment policy will need to be more closely aligned with industrial policy. This means...
Electricity producer Eskom offered a frank, albeit disheartening, assessment of the state of its existing coal-fired fleet during a recent briefing of lawmakers, warning that it would take some time for it to arrest the current high levels of unplanned outages at the...
More
 
 
Latest News
Updated 4 minutes ago In a bid to progress its contentious nuclear build programme and increase the contribution of nuclear energy to the country’s overall energy mix, government reiterates it is in talks with various prospective nuclear vendors over nuclear technologies that could...
Updated 35 minutes ago Turkish mobile operator Turkcell has been dealt another blow in its ongoing battle against South Africa-based mobile operator MTN Group, as the International Arbitration Panel dismissed the latest attempt to hold MTN legally accountable for allegedly blocking a...
Finance Minister Nhlanhla Nene
Updated 2 hours 12 minutes ago Finance Minister Nhlanhla Nene will have his work cut out at this week's budget to try and reassure disillusioned South Africans that the government still has gas in its tank to pull the economy out of the doldrums. Twenty years after Nelson Mandela swept the African...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
IAN EVANS AirWatch file synchronisation and sharing system was initially designed for a large airline company
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks