Q1 growth estimate in SSA revised down due to weak performance in Kenya

Q1 growth estimate in SSA revised down due to weak performance in Kenya

Iconoclastes

Iconoclastes

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Q1 growth estimate revised down due to weak performance in kenya

More complete data revealed that the economy of Sub-Saharan Africa (SSA) grew at a slower pace in Q1 than initially projected. According to an estimate compiled by FocusEconomics, regional GDP increased 2.0% annually in the first quarter of the year, a notch down from last month’s preliminary 2.1% estimate.

Despite the downgrade, the figure still represents a strong acceleration from Q4 2016’s 1.4% expansion as an economic turnaround is taking place in the region after an abysmal 2016 characterized by slowing growth and worsening imbalances in many economies.
The primary driver behind the downgrade to the Q1 estimate was slower-than-expected growth in kenya . A severe drought caused agricultural production to plummet and the manufacturing sector expanded tepidly. With the challenge of slowing growth and a large drought, the country will head to the polls in August for general elections. Previous votes have been characterized by bouts of violence and risks of instability are present. Early polls point to a victory for incumbent President Uhuru Kenyatta and a continuation of current policy.

Elsewhere in the region, a similar situation with political noise and poor economic activity is unfolding in South Africa. Although the economy is set to rebound from a terrible 2016, the recovery is likely to be weak due to poor investment and a weak labor market.

Moreover, a 14-point plan unveiled in July by Finance Minister Malusi Gigaba failed to offer any groundbreaking solution to the economy’s slump and the government has seen its popularity being eroded due to a corruption scandal, which has led to calls for the president to step down.

Political jitters weigh on growth outlook
FocusEconomics analysts trimmed their forecasts for Sub-Saharan Africa for a third consecutive month as a soft start to the year and politics dampen prospects. Regional GDP is now seen expanding 2.5% in 2017, down 0.1 percentage points from last month’s estimate. In 2018, growth is seen gaining pace as GDP is expected to increase 3.5%.

The downgraded 2017 outlook is due to downward revisions for the 6 of the region’s 13 economies. Lower growth prospects were seen for kenya and South Africa, as political uncertainties combine with weak economic momentum. On the other hand, forecasts were raised for Angola, Botswana, Mozambique and regional-giant Nigeria, while three economies’ projections were left unchanged.

Cote d’Ivoire and Ethiopia are expected to be the fastest-growing economies this year, both expanding 6.8%. On the flip side, the regional heavy-weights are the poorest performers with South Africa expected to grow a weak 0.7% in 2017, followed by Nigeria with a 1.3% expansion.

in positive territory in June and the non-oil sector returning to growth in Q1, while the recent approval of the long-delayed 2017 budget should provide greater policy certainty in the months ahead. In addition, oil production has increased so far this year as the threat from Niger Delta militants recedes. However, despite initially being excluded from further OPEC output cuts, there is now talk of including Nigeria in the deal in a bid to curb the supply of oil on the market and boost prices, which could hamper the sector’s return to full strength.

Encouragingly, the foreign exchange window introduced in April, which allows buyers and sellers to agree on an exchange rate, is succeeding in attracting dollars from abroad; over USD 3 billion have been traded since the launch, and the stock market has boomed in recent months.

The economy should pick up speed this year thanks to greater oil production, a solid agricultural sector and strong public capital spending.

However, continuing foreign exchange distortions, limited private sector credit and uncertainty over whether measures put forward in the Economic Recovery and Growth Plan (ERGP) will see the day could dampen the expansion. Panelists participating in the FocusEconomics Consensus Forecast expect the economy to grow 1.3% in 2017, up 0.1 percentage points from last month’s forecast, and 2.8% in 2018.

Sub-Saharan Africa Economic Outlook | Data & Forecasts
 
Nyinyi wakenya Mungu awasamehe tuu, the article haijasema Kenya single handedly are responsible for African economical downturn. I mean how could that be if Kenya has been growing at average of 5-6% for the last ten years.
 
Mwanzi1 said:
Nyinyi wakenya Mungu awasamehe tuu, the article haijasema Kenya single handedly are responsible for African economical downside. I mean how could that be if Kenya has been growing at average of 5-6% for the last ten years.
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" The primary driver behind the downgrade to the Q1 estimate was slower-than-expected growth in kenya . A severe drought caused agricultural production to plummet and the manufacturing sector expanded tepidly. With the challenge of slowing growth and a large drought, the country will head to the polls in August for general elections. Previous votes have been characterized by bouts of violence and risks of instability are present. Early polls point to a victory for incumbent President Uhuru Kenyatta and a continuation of current policy."
 
Iconoclastes said:
" The primary driver behind the downgrade to the Q1 estimate was slower-than-expected growth in kenya . A severe drought caused agricultural production to plummet and the manufacturing sector expanded tepidly. With the challenge of slowing growth and a large drought, the country will head to the polls in August for general elections. Previous votes have been characterized by bouts of violence and risks of instability are present. Early polls point to a victory for incumbent President Uhuru Kenyatta and a continuation of current policy."
Click to expand...
Still, data looks like an armchair analysis. Ethiopian, Tanzania, Ivory Coast have been growing above average for the past 10 yrs. They're more responsible of higher FDI in Africa but they are not mentioned. Ivory coast alone mwaka huu for first time they've export cocoa processed beans worth of $3.75 billion, more than twice of Netherlands $1.32 billion, half of an entire Kenyan export $5.25 billion. Overall Ivory coast have export worth of $12.7 billion 2016-17, Tanzania $6.6 billion.
 
Mwanzi1 said:
Still, data looks like an armchair analysis. Ethiopian, Tanzania, Ivory Coast have been growing above average for the past 10 yrs. They're more responsible of higher FDI in Africa but they are not mentioned. Ivory coast alone mwaka huu for first time they've export cocoa processed beans worth of $3.75 billion, more than twice of Netherlands $1.32 billion, half of an entire Kenyan export $5.25 billion. Overall Ivory coast have export worth of $12.7 billion 2016-17, Tanzania $6.6 billion.
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The armchair analysis is that claim presented by Cicero here that Kenya had inflated or "cooked" its data.

Ofcos they had put into account the data from all those countries, but the outcome still fell short of the forecasted result.
From the analysis in that report, Kenya was expected to make the most significant contribution in that expected outcome, thus the downgrade.

It goes to show how significant Kenya really is in the sSaharan region, such that even such a twitch in our economy has some repercussions in the whole region.
 
Mwanzi1 said:
Still, data looks like an armchair analysis. Ethiopian, Tanzania, Ivory Coast have been growing above average for the past 10 yrs. They're more responsible of higher FDI in Africa but they are not mentioned. Ivory coast alone mwaka huu for first time they've export cocoa processed beans worth of $3.75 billion, more than twice of Netherlands $1.32 billion, half of an entire Kenyan export $5.25 billion. Overall Ivory coast have export worth of $12.7 billion 2016-17, Tanzania $6.6 billion.
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Mwanzi wanishangaza sana. So your theory ni ati coz ivory coast wanaexport goods worth $12.7 bn na KE tunaexport $ 5.25 bn so Ivory coast should have a bigger economy than KE? Not necessarily. China exports more than U.S yet U.S has bigger GDP (norminal) than China. How come? Coz GDP is a much more complex creature and takes into account value of goods and SERVICES produced in an economy in one year. I put "services" in capital so u understand KE has a much bigger service sector ( Banks, Insurance, I.C.T companies, Telecom companies) than Tanzania will ever dream of. GDP is not just about goods ( exporting this and that) but also providing service. Infact more than 50% of Kenya's GDP is made up of service sector. We all don't have to export raw materials especially minerals, tumewaachia hiyo Kazi
 
Iconoclastes said:
The armchair analysis is that claim presented by Cicero here that Kenya had inflated or "cooked" its data.

Ofcos they had put into account the data from all those countries, but the outcome still fell short of the forecasted result.
From the analysis in that report, Kenya was expected to make the most significant contribution in that expected outcome, thus the downgrade.

It goes to show how significant Kenya really is in the sSaharan region, such that even such a twitch in our economy has some repercussions in the whole region.
Click to expand...
I don't think so, Kenya and Ethiopian are relatively boosting the same numbers when it comes to economical output. If what your saying is true, then even Ethiopian can create the same impact if they fell short on there economy. But I don't want to believe that whatever happening in Kenya will directly have affect in Mali or Madagascar. African economy is not integrated like other part or the world. (When Kenya sneezes, its Kenya alone catches the flu).
 
Iconoclastes
Post hoc falacy
Myself dont see how the a fourth paragraph of five lines justified the cause and effect relationship. No detailed elaboration showing how an economic downturn in Kenya affects the rest of SSA.
 
Tony254 said:
Mwanzi wanishangaza sana. So your theory ni ati coz ivory coast wanaexport goods worth $12.7 bn na KE tunaexport $ 5.25 bn so Ivory coast should have a bigger economy than KE? Not necessarily. China exports more than U.S yet U.S has bigger GDP (norminal) than China. How come? Coz GDP is a much more complex creature and takes into account value of goods and SERVICES produced in an economy in one year. I put "services" in capital so u understand KE has a much bigger service sector ( Banks, Insurance, I.C.T companies, Telecom companies) than Tanzania will ever dream of. GDP is not just about goods ( exporting this and that) but also providing service. Infact more than 50% of Kenya's GDP is made up of service sector. We all don't have to export raw materials especially minerals, tumewaachia hiyo Kazi
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Na mimi unaiacha mdomo wazi, hebu tujaribu kuondoa hiyo $12bln out of African economy tuone kama hiyo article itaandikwa in the same way. If Kenya has variety sources of income that is good for Kenya. If kenya prolong kuwa na weaker sales than country like Ivory Coast then what will happen, will kenya hold her crown?At the same time Kenya will not be richer than a country which exports large single commodity like oil eg. Angola or Saudi Arabia. Lets compare that to Kenya and Tanzania, Tanzania sale more resources, Kenya sale services. But who is selling more? last year Tanzania had sale more than Kenya (over a billion dollars). Kenya might supply bank software, but Tanzania will supply copper and gold which is vital ingredients to computer manufacturing.
 
Mwanzi1 said:
Na mimi unaiacha mdomo wazi, hebu tujaribu kuondoa hiyo $12bln out of African economy tuone kama hiyo article itaandikwa in the same way. If Kenya has variety sources of income that is good for Kenya. If kenya prolong kuwa na weaker sales than country like Ivory Coast then what will happen, will kenya hold her crown?At the same time Kenya will not be richer than a country which exports large single commodity like oil eg. Angola or Saudi Arabia. Lets compare that to Kenya and Tanzania, Tanzania sale more resources, Kenya sale services. But who is selling more? last year Tanzania had sale more than Kenya (over a billion dollars). Kenya might supply bank software, but Tanzania will supply copper and gold which is vital ingredients to computer manufacturing.
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Haya wacha nijaribu Kiswahili yangu mbaya. Nakubaliana nawe kwamba hiyo export ya Ivory Coast ni Muhimu kwa Afrika Lakini pia lazima ukubaliane nami kwamba service sector ya KE ni muhimu kwa Afrika pia. Angalia umuhimu wa KQ kwa Africa especially T.Z. Nakumatt Hata kama ina matatizo iko T.Z. K.C.B iko T.Z. Equity bank iko mpaka D.R Congo e.t.c
 
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