How did Africa do in 2014?

Author:Dalby, Alexa
Position:Economic conditions of africa

Last year African Business predicted that 2014 was going to be the tipping point for the continent. Africa's growth in 2014 has continued to surpass that of the rest of the world, but what no one could have predicted a year ago was the appearance of a black swan in the shape of the sudden, devastating outbreak of Ebola in West Africa, its tragic human toll and its potential knock-on effects on some of Africa's economies. So now, as we look back at the old year, how well did Africa do in 2014? And how accurate were our predictions? Alexa Dalby checks out the forecasts, starting with politics.

Presidents in the spotlight

"Two big elections will be on everyone's minds, even though one of them will not take place until 2015.. .Jacob Zuma will be re-elected President of South Africa, but this will be the toughest election yet for the ANC", we wrote.

Jacob Gedleyihlekisa Zuma was indeed re-elected as President in South Africa's fifth fully democratic election and the ANC returned to power in May with a reduced share of the vote--"brand loyalty", our South African correspondent Tom Nevin called it. Despite disaffection with its leaders, the ANC gained 62.1% of the vote against the Democratic Alliance with 22.2% and Julius Malema's new Economic Freedom Fighters party with 6.5%. The ANC was punished most heavily in prosperous Gauteng but did well in Soweto township.

The other big election--in Nigeria--will take place in February 2015, but it was not until October 2014 that serving President Goodluck Jonathan finally threw his hat into the ring, confirmed that he would run again and won the nomination for the People's Democratic Party unopposed, despite concerns about Boko Haram and the economy.

Meanwhile, in East Africa, another President was in a less-than-welcome spotlight. "Will Kenyatta and Ruto face trial by the ICC? They won't", our correspondent Richard Seymour wrote. Well, so far this is half right. President Uhuru Kenyatta surprised observers by temporarily stepping down from office to appear at the ICC (International Criminal Court) hearings in The Hague in October, the case against him being conducted in his personal capacity, not as President, but, in December, the ICC dropped the five charges against him. However, Deputy President William Ruto did go on trial, together with journalist Joshua arap Sang, and his trial is likely to continue through 2015.

Who's the biggest?

We wrote, "With commodity prices set to stagnate or even fall in 2014, South Africa will not have an easy year.. .The depreciation of the rand is expected to continue due to South Africa's protracted labour unrest in the mining and farm sectors. Expectations are that this trend will continue".

In 2014, the rand did continue to be dogged by concerns about South Africa's unstable electricity supply, credit rating downgrades, budget and current account deficits.

Strikes and labour unrest in the platinum and other industries continued, resulting in a 6% loss in mining production by the time August came around.

But our correspondent was even more prescient: "Eventually Nigeria will overtake South Africa to become the biggest economy --although how long that will take is a matter of fierce debate.. .It is the African giant in waiting".

In fact, as headlines proclaimed in April, Nigeria is in waiting no longer. Sooner than expected, it rebased its GDP and became Africa's largest economy, surging to $488bn for 2013, up from $252.6bn against South Africa's $384.3bn--a whopping 89% increase, and leapfrogging South Africa.

"There are four sub-Saharan states in the top 12 fastest growing economies in the world--Zambia, Eritrea, Sierra Leone and South Sudan", we wrote. According to the World Bank, sustained growth is transforming Africa's economies. Sub-Saharan Africa has at least eight of the top fastest-growing economies--among them Ethiopia, Cote d'Ivoire, DR Congo, Mozambique, Tanzania, Nigeria, Uganda and Rwanda.

Oil slips and slides

With oil exploration taking place offshore and onshore, in and around most of Africa and with two of Africa's largest economies Nigeria and Angola--being major producers, fluctuations in the price of crude oil had significant effects. At the end of 2013, we noted that the price "now seems to have settled at a little over $100. That's a price that makes most discoveries in Africa profitable, but...

To continue reading