Analysts believe (http://www.theeastafrican.co.ke/business/East-Africa-economies-rough-ride-2017/2560-3815022-qqmjpfz/index.html) that Africa’s economic performance in 2016 was, in their words, ‘below par’. It was below par because elections held in 2015 and 2016 were mildly destabilizing and the situation could actually get worse as a result of the drought, food inflation and weakening national currencies.
While it is generally a good rule to defer to the opinions of those who know more, it is sometimes unclear how much these experts actually do not.
To set the record straight: it is only in the 3rd quarter of 2016 that analysts realized that African economies were not going to grow as much as it had previously been forecast.
While one could make a case that the elections in Tanzania had a destabilizing effect, the elections of Magufuli prevented Tanzania from experiencing any kind of destabilization. Hence, while one could argue that Tanzanian economy in 2016 did not live up to the expectations that many analysts had, the failure to do so cannot be attributed in any way to the elections and to President Magufuli.
Third, these analysts who predict doom and gloom for Africa in 2017, totally neglected several of the reasons why the performance of African economies in 2016 was ‘below par’. Two such reasons are: political instability and lower commodity prices.
Except for Ethiopia, where economic growth was engineered by massive investments in infrastructures, the growth of African economies in the 2000-2015 period was largely a function of the soaring commodity prices. Inevitably, as the price of commodities fell, the growth rate of African economies slowed down.
Furthermore, African economies are hurt by local, regional, and continent-wide political instability. East Africa is a brilliant case in point. The civil war that devastated South Sudan, destroyed its economy and displaced millions of people, took a toll on the economic performance of the whole East African region.
Whether Africa’s economies will grow in the future as much as they have in the recent past is a question for the ages. Some analysts think that the party is over. There is some reason to believe that it is not over until it is over.
Better governance, better leadership, more political stability, some economic diversification and higher commodity prices could one again ensure that Africa experiences sustained strong growth for many years to come.