South Africa’s gross domestic product (GDP) growth rate is expected to weaken to 0.7% this year on the back of the drought, low commodity prices and increasingly low business confidence.
So said Abebe Shimeles, acting director of Development Research for the African Development Bank (AfDB) group, launching the African Outlook 2016 report during the group’s 51st Annual Meetings held in Lusaka, Zambia, this week.
“Persistent shortages in electricity have had a knock-on-effect on the economy,” said Shimeles, adding that “limited electricity supply has also weighed down manufacturing, mining and service-sector activity”.
He also said the worst drought in two decades had continued to devastate agriculture in South Africa – with its proportion of GDP having been reduced by 16.2%. Grain production is expected to decline by more than 50%.
Shimeles said “slow progress in delivering economic and social services in townships and rural areas remains one of the major challenges to government.”
Rapid implementation of the National Development Plan (NDP) is, however, projected to yield real GDP of 2.6% in 2017 and 2.8% in 2018.
