http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.09Change: 0.08
R/$ = 10.50Change: 0.03
Au 1305.70 $/ozChange: 6.82
Pt 1484.50 $/ozChange: 11.00
 
 
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 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
 
 
 
 
 
 
 
 
Other Editorial Insight News
Article contains comments
Cabinet will soon be called upon to make one of its most important decisions of the year now that State-owned electricity producer Eskom has handed over its ‘comprehensive sustainability plan’ to Public Enterprises Minister Lynne Brown. Eskom claims to be facing...
A new report urges African policymakers to pay closer attention to improving the balance between consumption- and investment-led growth, while suggesting that countries should target minimum investment levels of 25% of gross domestic product to sustain economic...
Finance Minister Nhlanhla Nene has warned that South Africa is struggling with a triple deficit: its stubbornly high current-account deficit, a fiscal deficit and a trust deficit. But he has also given an assurance that government is planning to do what it can to...
Article contains comments
More
 
 
Latest News
Updated 20 minutes ago Unregistered motorists in Gauteng owe the SA National Roads Agency Limited (Sanral) over R1-billion in unpaid e-toll accounts, Transport Minister Dipuo Peters said. As of May 31, the unaudited amount owed for more than 90 days was R156 623 567 while R995 362 885 was...
The head of economics and trade at the Delegation of the European Union (EU) in Pretoria has acknowledged South Africa’s trade negotiators won important concessions in the long-running Economic Partnership Agreement (EPA) trade talks. But he says it was South...
Responding in writing to a recent Parliamentary question by the Democratic Alliance, Transport Minister Dipuo Peters has provided an update for each of the country’s 13 bus-rapid transport (BRT) systems, noting that each network is at a different stage of...
More
 
 
Recent Research Reports
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.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
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