Hi, Quartz Africa readers!
The outlook
Trying to get to grips with what to expect from Africa’s economies in 2019 can be set into three categories of discussion: the good, the underwhelming and the disconcerting.
The good news is that in 2019, like in 2018, Sub Saharan Africa will be home to several of the world’s fastest-growing economies, according to the IMF. The region’s growth numbers will be led again by Ethiopia, Rwanda, Ghana, Côte d’Ivoire, Senegal, Benin, Kenya, Uganda, and Burkina Faso who remain in the top 10. Tanzania joins that group this year, replacing Guinea. The region is expected to have overall economic growth of 3.8%, on par with the global forecast of 3.7%.
That growth is driven by the steady rebound of commodity prices, an improvement in the global economy and improved capital market access after several of the countries made valiant attempts to get their fiscal books in order following the commodity price slump of 2014-15.
But those numbers would be even better were it not the underwhelming projections from the continent’s big two: Nigeria and South Africa. Both are recovering from a pretty tough 2018 and both have presidential elections this year.
Nigeria is expected to see an expansion of 2.3%—better, but not much, than the 1.9% of 2018. South Africa will expand by 1.4% which is, again, an improvement on 0.8% last year, but nothing to cheer about. As Washington DC think tank Brookings notes in this year’s Foresight Africa report, that kind of growth doesn’t look great up against 2.5% annual population growth.
If you leave out the big two and Angola, aggregate growth for Sub Saharan Africa rises to 5.7% for 2019. “About half of the world’s fastest-growing economies will be located on the continent, with 20 economies expanding at an average rate of 5% or higher over the next five years, faster than the 3.6% rate for the global economy,” writes Brahima Coulibaly, director of Brookings’ Africa Growth Initiative.
However, we must address the elephant in the room when it comes to African economies in 2019 and that is of course, rising debt.
We’re coming to the end of a decade of cheap debt which some African countries piled on in the latter half of that decade. There’s a real risk, with the likelihood of global recession in 2020, commodity prices will fall as demand drops. Several African countries might struggle to manage their debt servicing—especially if interest rates continue to rise.
Brookings says “at least” 14 countries are either in debt distress or at high risk of debt distress up from six countries just five years earlier. As the global economic environment changes updating debt management strategies should be a priority for African policymakers in 2019, and they’ll need “to take bold steps to strengthen governance around tax revenue collection.”
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Kenya will start teaching Chinese to elementary school students. Kenya is going to introduce Mandarin lessons to school children from grade four (aged 10) starting next year. The government says it wants to improve employment competitiveness and facilitate better trade and connections with China.
Nollywood’s focus on movie quality over quantity is starting to reap box office returns. Nigeria’s Nollywood movie industry has long been defined by its low budget, high volume offerings, a workaround for the industry’s complex distribution problems. But, as Yomi Kazeem explains, a growing shift from quantity to quality is seeing Nollywood movies driving big box office returns at local cinemas and attracting international backers.
Nigeria is on edge with multiple internal security conflicts as it prepares for tense elections. Ahead of general elections next month, Nigeria’s overstretched law enforcement agents are dealing with several internal security challenges. A resurgence in Boko Haram attacks on both civilians and military personnel and sustained pastoral conflicts in key agricultural regions could potentially impact voter turnout, but there are troubles in other regions too, explains Mark Amaza.
A search for Mozambique’s secret $2 billion debt shows how the global banking system aids corruption. A 47-page indictment filed in a New York court details how three Credit Suisse bankers and a Lebanese businessman methodically orchestrated whole maritime projects to enrich themselves and corrupt government officials. As Lynsey Chutel writes, the arrest of Mozambique’s former finance minister in South Africa is only the beginning.
Madagascar has become a business outsourcing hotspot thanks to its super-fast internet. Madagascar is taking full advantage of its reliable internet connections—the fastest on the continent. As Emilie Filou reports, a booming business outsourcing industry is employing thousands as the island nation increasingly competes with market leaders to serve global Francophone companies.
Should anyone really own the phrase “Hakuna Matata”?. After the outrage among Kiswahili speakers in East Africa after finding out The Walt Disney Co. owns the phrase “Hakuna Matata”, Dr. Njoki Ngumi examines whether Africans have done enough to protect their cultures from capitalism’s cultural pragmatists and vultures. She writes: “The morality of a trademark is a bone of contention for Africans: dignity is apparently only for those with high GDPs.”
Chart of the Week
Startup investment in Africa jumped to record levels in 2018. African startups saw an almost four-fold increase in funding received in 2018 as the number of funding deals more than doubled. Crucially, startups on the continent are also increasingly being recipient of big ticket rounds of over $5 million as more startups than ever get beyond seed and early stage funding.
Other Things We Liked
DR Congo’s eventful election result week. After many delays, and way into the early hours of Thursday morning (Jan.10), DR Congo’s electoral commission finally declared Felix Tshisekedi, the winner of the Dec. 30 presidential election. The results were immediately called into question by runner-up Martin Fayulu, who was backed by the Catholic Church. And further analysis by Pierre Englebert for African Arguments seemed to back up various concerns. As we were going to press Fayulu had taken the issue to the courts.
Why the Louvre of France is returning to Africa what is hers. The larger-than-life-size iron sculpture of a warrior now on display at the Louvre is one of 26 sculptures France has agreed to return to the Republic of Benin, a former colony. For the Royal Gazette, John Warne Monroe examines the significance of this repatriation by exploring the history of the iconic sculpture which was taken after a late 19th century French battle with the former Kingdom of Dahomey.
The white privilege of visas and Africanist academia. Why aren’t more Africa-focused academic conferences taking place in Africa? Kenyan writer Rasna Warah for the East African Review looks at how African academics are getting increasingly sidelined in discussing their specialist topics related to their own countries when on the international stage and even at home. Warah writes that the problem extends to everything from conferences to research funding.
ICYMI
GrowthAfrica 2019 acceleration program. The program helps scale ambitious, innovative businesses from diverse sectors in Kenya, Uganda, Ethiopia, and Zambia. (Jan. 31)
The Diamond empowerment fund. The Mandela Institute for Development Studies earmarks the fund to students from a diamond-producing African nation seeking a graduate degree in fields as diverse as biotechnology, AI, and mining taxation. (May 31)
Keep an eye on
ICC to rule on releasing ex-Ivorian president (Jan. 15). The Hague-based International Criminal Court will decide whether to grant a provisional release to former president from Côte d’Ivoire Laurent Gbagbo who is on trial for crimes against humanity.
Nationwide protests in Sudan continue. Organizers have said the countrywide protests calling for president Omar al-Bashir to resign will continue amid widespread discontent not just with austerity measures but also with his three-decade rule.
*This brief was produced while listening to Fouta Toro by Orchestra Baobab (Senegal).
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, made-up Swahili trademarks to sell to Disney and Madagascar internet speeds to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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