GDP data by Standard Bank shows that Africa’s leading minerals-based economies have all been underperforming against non-commodity peers over the last decade, lending credence to the idea that these countries may be yoked by “the resource curse”. According to the data, much of it based on research by the International Monetary Fund (IMF), out of 16 countries whose GDP growth trajectories have been tracked since 2014, the lowest performing eight are all commodity producers. Angola, Botswana, the Democratic Republic of the Congo, Namibia, Nigeria, and South Africa – all of them have GDP figures that are either flatlining or barely flickering with signs of life. Even Mozambique, tipped to quadruple its GDP by 2030 thanks to liquid natural gas finds near its border with Tanzania, finds itself among countries whose projections for 2020 will most likely continue to taper off. In stark contrast to this are the consistently stronger and more stable economies of noncommodity performers. Cote d’Ivoire, Ethiopia, and Tanzania had GDP data that were recorded at 8.8, 10.3, and 6.7% respectively in 2014, the year the oil price started tanking because of consecutive setbacks. And although the economies of Cote d’Ivoire and Ethiopia marginally slowed, they managed to arrest most of the damage and have GDP projections for 2020 of 7.4 and 7.8% respectively. Tanzania, in comparison, is edging back slightly – up to 7.0% where its GDP was in 2018. Even Uganda, a relative newcomer to the commodities market, is showing economic resilience, recording GDP growth from 5.1% in 2014 to next year’s projected figure of 6.6. The continent’s traditional commodity producers, in comparison, all slumped intosluggish growth territory with some performing marginally better than others. Botswana’s GDP went from 4.2 in 2014 to a projection of 3.8% for 2020, the DRC from 9.5 to 4.1, Mozambique from 7.4 to 3.7, Namibia from 6.4 to 0.5, and Zambia from 6.0 to 2.4 – all for the same period. Then there’s South Africa, the continent’s erstwhile commodities game-changer turned underperformer of note. To be fair, in 2014 South Africa’s GDP was measured at 1%. In 2016 it went from 1.3 the year before to 0.6, recovered somewhat to 0.8, and by the end of this year will probably be back down to 0.6 before expectedly recovering to 1.6 percent next year. One of the reasons a country like South Africa managed to avoid the kind of sharp volatility experienced by commodity peers, tottering along at a low GDP base without showing significant peaks and troughs, is because of proper foreign exchange regimes. Unfortunately the same cannot be said of leading West African oil producers. According to Phumelele Mbiyo, head of Africa research at Standard Bank, it’s why the commodity collapse experienced in 2014 and 2015 had such a massive impact on the economy of Nigeria, taking its GDP from 6.2 back then to a projected percentage of 2.3 for 2020. Fellow West African oil producer Angola also felt the brunt of it, going from 4.8 in 2014 to next year’s projection of 1.4. “Policy makers in those countries were steadfastly hanging on to their currency perks until it got to the point where they were rationing foreign exchange (forex), in effect slowing down economic activity to ensure that there was a balance between imports and exports”.
INSERT: Tanzania is edging back slightly − up to 7.0% where its GDP was in 2018. – Phumelele Mbiyo