Portuguese-speaking African countries grow faster than counterparts, Guinea-Bissau lags behind

21 April 2008

Washington, United States, 21 April – African countries with Portuguese as the official language are set to grow at a higher rate than the average of their counterparts in 2008, with Guinea Bissau, however, falling behind, according to the IMF’s “Spring Forecasts”.

Angola continues to have the most vigorous economy of the five Portuguese-speaking African countries, however the growth forecast was cut substantially compared to end-of-year forecasts: from 26.6 percent to 19.4 percent – even so this is still well above the average of 11.3 percent for the group of petroleum exporting nations.

The 2007 forecast was also cut, though more modestly, from 23.4 percent to 20.4 percent.

The group of petroleum exporting nations continues to grow at a rate significantly above the others, with Angola and Equatorial Guinea leading, thanks to “the start of production at new oil wells,” said the IMF.

Mozambique continues to grow above the average for its counterparts – countries with low income- for almost a decade, and should not lose momentum in 2008 – the IMF forecasts growth of 7 percent, the same as was registered for last year.

Among countries of medium income, Cape Verde stands out; its economy should speed up from 6.9 percent to 7.7 percent this year, much higher than the average of 4.0 percent.

For Sao Tome and Principe the forecast is for an increase of 6.0 percent, in line with 2007, better than the 5 percent registered on average by countries in its group – fragile countries.

In the same group, Guinea Bissau stays at 3.2 percent for predicted growth for this year, still 0.7 percentage points above the figure for last year.

With regard to inflation, the IMF predicts a slowdown for all five Portuguese speaking countries, the most significant in Mozambique – 5.7 percent, 2.2 percent below the figure for last year – and Sao Tome and Principe – 14.1 percent, a fall of 5.8 percent.

For Cape Verde, the forecast is for 3.3 percent (down 1.1 percentage point) and, against the aims of the authorities, prices in Angola should rise once again to reach double figures – 11.4 percent (down 0.8 percentage points.

Mozambique is referred to as an example of “excellent performance that reflects a responsible monetary policy supported by judicious fiscal policies,”as regards price stability in sub-Saharan Africa.

Cape Verde and Mozambique are the countries in which investment currently represents the biggest share of the GDP – 47.5 percent and 32.5 percent respectively, maintaining a constant upward course trend.

In Angola, this figure should shrink from 12 percent to 10.6 percent, below the average of 20.4 percent recorded for the group of petroleum exporting nations.

With regard to financial balance, Angola seems to be in a more favourable situation, with a surplus of 6.8 percent, in relation to GDP, not including investments.

Even including donations, Cape Verde and Mozambique register deficits of 3.7 percent and 6.4 percent respectively, and without this help, these figures rise to more than double.

In this area, the most difficult situation is that of Guinea Bissau, with a deficit of over 20 percent of the GDP

If in Angola the balance of trade represents more than 50 percent of the GDP, in the other Portuguese speaking African countries the trade deficit had a negative effect, particularly on Cape Verde, less than 49.9 percent, and Sao Tome and Principe, less than 42.2 percent.

As for the monetary situation, Angola also stands out, with its currency (the kwanza) showing an appreciation of 106.9 percent relative to the base year 2000.

In this area, the most stable currency seems to be that of Cape Verde whose escudo is pegged to the euro. (macauhub)