Page 51 - 40th Summit Brochure 2020

Investments and Savings States that breached the regional target of
Average total investments and gross na- public debt of 60 percent of GDP increased
tional savings have remained below the re- in 2019 with South Africa and Zimbabwe
gional target of 30 percent of GDP for some joining the 2018 group of Angola, Malawi,
time. After a decline from 26.2 percent of Mozambique and Zambia. T e increasing
GDP in 2015 to 23.5 percent of GDP in public debt levels exert additional burden on
2016, total investments have been on a the resources of Member State ras debt serv-
steady increase up to 2019. The region ice costs increase.
recorded total investments of 27.1 percent
of GDP in 2019 compared to 23.5 percent External Position
of GDP in 2018. Only five Member States T e heavy reliance on commodities, the
recorded investments above the regional weak commodity prices resulting from the
target -- Botswana, Lesotho, Mozambique, slowdown in global economic activity, and
Tanzania and Zambia. Gross national sav- escalating global trade tensions adversely af-
ings are expected to remain below 20 per- fected the external position in 2019. How-
cent of GDP estimated at 18.7 percent in ever, the severity was varied across the
2019 from 18.8 percent of GDP in 2018. SADC Member States. As a result, the re-
Botswana, Tanzania and Zambia recorded gional current account balance widened
total gross national savings above the re- slightly from an average def cit of 5.6 percent
gional target of 30 percent of GDP in 2019. of GDP in 2018 to 5.8 percent of GDP in
2019. Notable changes of the current ac-
Fiscal Positions count position in 2019 occurred in Mozam-
Global economic developments, weak com- bique where the current account def cit
modity prices and adverse weather conditions widened by an estimated 11.3 percent of
weighed down on the regional economy in GDP, while in Zimbabwe it narrowed by an
2019, with varying negative impacts on the f s- estimated 9.2 percent of GDP to achieve a
cal positions of Member States. T e regional surplus. In Mozambique the current account
f scal def cit average has continued to improve def cit ref ected the increase in capital goods
48 since 2017. Fiscal def cit as a percent of GDP importation, while narrowing of the current
is estimated to have improved from 4.1 per- account def cit in Zimbabwe was driven by
cent of GDP in 2018 to 3.4 percent of GDP in a 32 percent contraction in imports follow-
2019, largely due to tax reforms and improve- ing import compression measures instituted
ments in f nancial management. In 2019, by government.
Lesotho and Mozambique joined Angola,
DRC, Madagascar, Mauritius, Seychelles and Macroeconomic Convergence Programme
Tanzania who met the f scal def cit target of 3 Preliminary data indicates that economic
percent of GDP in 2018. Mauritius which met growth which slowed down in 2019 is ref ec-
the target in 2018 missed the target margin- tive of the sluggish global economy. Only the
ally in 2019 with a def cit of 3.2 percent of United Republic of Tanzania achieved the
GDP. Lesotho and Mozambique made com- seven percent economic growth target, driven
mendable improvements to their f scal posi- largely by major infrastructure projects. T ere
tions in 2019. were notable improvements in the economic
performance of Member States based on the
Public Debt MEC primary indicators (inf ation, f scal
Public debt continued on an upward trend def cit and public debt). T e number of Mem-
on the brink of breaching the regional ber States that achieved the three primary in-
threshold of 60 percent of GDP despite the dicators increased to f ve in 2019 (DRC,
improvement in f scal positions in 2019. Lesotho, Madagascar, Seychelles, and Tanza-
T is is mainly due to debt not directly re- nia) from three in 2018 (Mauritius, Seychelles
lated to budget f nancing. T e public debt and Tanzania). T e number of Member States
for the SADC region is estimated at 59.9 that achieved the inf ation and f scal def cit
percent of GDP in 2019 up from 48.8 per- targets increased to eleven and eight in 2019
cent recorded in 2018. Signif cant increases from nine and six in 2018. However, the
in debt levels were observed in Zimbabwe, number that achieved the public debt target
Mozambique, Angola and Eswatini that decreased to nine in 2019 compared to
added 89.3 percent of GDP, 22.9 percent of eleven in 2018, revealing the increasing debt
GDP, 22 percent of GDP and 16.9 percent of levels likely to lead to increased f scal con-
GDP, respectively. T e number of Member straints in the region.