Cabo Verde recorded the biggest economic growth among all the Portuguese-speaking African countries, as a new year is about to begin in which Mozambique is expected to see strong economic acceleration and a possible return to growth for Angola.
Projections from the International Monetary Fund (IMF) point to the growth of 5% in 2019, a rate that is expected to continue in 2020 and the following years, while the Cape Verdean government included a growth rate of 5.8% in its State BUdget for next year.
The Cabo Verde National Statistics Institute (INE) reported that economic activity was accelerating – in the third quarter of 2019 there was a 6.7% rise in GDP driven by final consumption (rise of 7.7%) and exports (+11.6%).
The government of Ulisses Correia e Silva aims to increase economic growth, improve the business climate and speed up implementation of structural reforms.
“The note from the Budget Support Group (GAO), in its latest assessment of Cabo Verde, is very positive, the macro-economic framework is stable, the economy is growing, debt is reducing, the deficit is being reduced, the business climate is improving, but we have to do more, do better and faster, so that we can reach growth of 7%,” the minister said recently.
In accelerated expansion, but based on a lower GDP, was Guinea-Bissau, which is expected to grow by 4.6% in 2019, according to the IMF, which forecasts moderate growth acceleration for the Guinean economy, to around 5%.
Sao Tome and Principe is expected to grow by 2.7% in 2019, but IMF projections also point to increased growth in the coming years.
The biggest boost to economic growth in the next few years is expected to happen in Mozambique, with the IMF forecasting acceleration from 2019, to real growth of 5.5% in 2020.
The final statement from the latest IMF mission to Mozambique said that the forecast growth is a result if post-cyclone reconstruction efforts, a recovery in agriculture and the economic stimulus of a gradual easing of monetary conditions and repayment of domestic supplier debts.
“The construction sector and other activities should also benefit from investment in large liquid natural gas projects, and inflation should remain low, with a slight rise to 5.0% at the end of 2020, compared with 3.0% at the end of 2019,” it said.
Fitch Solutions also recently improved its projections for Mozambique, forecasting that GDP would grow by 2% in 2019 and 4.2% in 2020, thanks “to the growth of gross fixed capital formation (…) following post-cyclone reconstruction and investments in the gas sector, despite public investment remaining limited in the short term.”
In Angola, 2019 is expected to be the fourth consecutive year of GDP contraction (-0.3% according to the IMF), but the government and some institutions expect an up-tick in 2020, although the projection is not unanimous.
While the IMF projects growth of 1.2% in the New Year and the Government forecast 1.8%, the Economist Intelligence Unit has forecast a contraction of 1.9% due to a drop in oil production and “drops in government revenues, due to public expenditure and private consumption.” (macauhub)