by Joseph Ngwawi – SANF 06 No 65
The southern African economy is projected to grow by six percent in 2006 but countries will have to raise their efforts if the region is to meet the global target necessary to eradicate poverty.
The economy of the 14-member Southern African Development Community (SADC) expanded by five percent in 2005 and is expected to better that performance this year on the back of strong performances by countries such as Angola.
Angola achieved the highest real Gross Domestic Product (GDP) growth in 2005 of 15.6 percent, followed by Botswana at 8.3 percent, Mozambique at 7.7 percent and the United Republic of Tanzania with 6.9 percent growth.
Regional economic powerhouse, South Africa, registered a modest five percent real GDP growth last year, according to figures released at the ongoing SADC Summit in Maseru, Lesotho.
The SADC Council of Ministers, which met on 15-16 August in preparation for Summit, noted the robust performance by a region once negatively affected by civil wars in some of its mineral-rich member states.
Timothy Thahane, incoming chairperson of the Council of Ministers and Lesotho’s Minister of Finance and Economic Planning, said the ministers were, however, concerned the region still needs to work hard as the projected six percent growth “remains below the seven percent set target for the developing nations to attain the Millennium Development Goals (MDGs) by 2015.”
The Council of Ministers comprises one or two ministers responsible for finance, economic development and planning from all the SADC member states.
The MDGs are the outcome of the United Nations’ Millennium Summit held in September 2000. During the New York summit world leaders agreed on a set of eight targets aimed at eradicating human suffering in developing countries.
Other major achievements on the economic front during the past 12 months were the relative successes scored by some countries in the fight against inflation and in tightening expenditures.
Most countries managed to maintain their inflation rates at single digits, with Angola halving the rate of change of prices of goods and services during 2005.
The regional inflation average for 2005 was 23 percent. The figure is a more manageable 10.8 percent if Zimbabwe’s figures are not computed. National statistics show that Zimbabwe’s annual inflation ended December 2005 at 585.8 percent.
South Africa slashed its fiscal deficit to 0.5 percent from 1.5 percent in 2004/05 while Angola registered a surplus of 7.5 percent in 2005 against a 1.5 percent deficit the previous year.
The robust performance by Angola is due to improved oil revenues triggered by geo-political tensions surrounding the Iran-West nuclear stand-off as well as production disruptions in Nigeria and dwindling international stockpiles.
SADC executive secretary, Tomaz Augusto Salomao, noted that Angola, South Africa and Nigeria account for the bulk of foreign direct investment (FDI) inflows into sub-Saharan Africa.
According to the World Bank, sub-Saharan Africa takes up a paltry one to two percent of all the annual FDI inflows in the world.
“If we take out South Africa, Nigeria and Angola, that leaves only 0.5 percent of the world FDI inflows coming to Africa,” Salomao told journalists in Maseru ahead of the Summit of SADC Heads of State and Government taking place from 17-18 August.
