1. International countries vs. SADC economic Development context overview
TIPED GGDA
November 9th, 2017
Welcome

2. The global US fed rate benchmark
The global US fed rate benchmark.. Cost of money is rising from unprecedented “cheap money” stimulus

3. USA Non farm payrolls are also looking healthy… why are they important?

4. How well do you understand the SADC region and the various economies
How well do you understand the SADC region and the various economies? What lessons from the past can be applied to future policy?

5. SADC economies grew by an average of 4
SADC economies grew by an average of 4.7% annually, but with significant variance in SADC growth rates over 10 years
GDP per capita growth (annual %) 2003–2013
Source: World Bank,
World Development Indicators ,
worlddevelopment-indicators, accessed 22 October 2014
Angola
Botswana
Lesotho
Madagascar
Malawi
Mauritius
Mozambique
Namibia
South Africa
Seychelles
Swaziland
SADC
Tanzania
Zambia
Zimbabwe -4 -2 2 4 6 8
DRC* *
Democratic Republic of the Congo
“European Union’s average of about 2% per year, but SADC lags behind other developing regions such as ASEAN which grew at 7.4% per annum” (world bank)

6. South Africa is the main player, followed by Angola and Tanzania
Regional GDP country share in SADC, 2013
Source: World Bank,
World Development Indicators ,
worlddevelopment-indicators, accessed 22 October 2014
Democratic Republic
of the Congo
4,2%
Namibia 1,9%
Mozambique 2,3%
Mauritius 1,9%
Malawi 1,1%
Madagascar 2,7%
Lesotho 0,4%
Botswana 2,7%
Angola 13,6%
Zimbabwe 2,0%
Zambia 3,9%
Tanzania 7,1%
Swaziland 0,7%
Seychelles 0,2%
South Africa 55,5%

7. Ten most inhibiting factors to doing business
The Global Competitiveness Report 2014–2015 shows that access to finance, the prevalence of corruption and red tape, insufficient human capital and a lack of physical infrastructure remain significant inhibiting factors to doing business in SADC.
Ten most inhibiting factors to doing business
Source: World Economic Forum,
Global Competitiveness Report 2014–2015 ,
reports/global-competitiveness-report
Percentage of responses
Access to financing
Corruption
Inadequate supply of infrastructure
Inefficient government bureaucracy
Inadequately educated workforce
Poor work ethic in national labour force
Restrictive labour regulation
Tax rates
Inflation
Crime and theft

8. All SADC countries lost ranking in ease of doing business over last 10 years, with the exception of Tanzania from a low base
Country
2006
(155 countries)
2010 (183 countries)
2014
(188 countries)
2015
(189 countries)
Change in rank
2006 to 2015
Angola
135
171
179
181
-46
Botswana 40 52 56 74
-34
DRC
155
176
183
184
-29
Lesotho 97
142
136
128
-31
Madagascar
131
144
148
163
-32
Malawi 96
141
164
-68
Mauritius 23 21 20 28 -5
Mozambique
110
132
139
127
-17
Namibia 33 98 88
-55
Seychelles
N/A
109 80 85
South Africa 32 36 41 43
-15
Swaziland
123
Tanzania
140
125
145 +9
Zambia 67 83
111
-44
Zimbabwe
126
168
170
-45
World Bank, Ease of Doing business 2006, 2010, 2014 and 2015 rankings
Source: World Bank, Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank,

10. SADC Sectors’ contribution to GDP (%), 2013
Country
Agriculture
Industry
Services
Angola
10.83
56.98
32.18
Botswana
2.54
36.91
60.55
DRC*
25.16
35.09
39.75
Lesotho*
7.83
36.57
55.60
Madagascar*
29.11
16.00
54.89
Malawi
26.96
18.79
54.25
Mauritius
3.27
23.07
73.66
Mozambique
29.25
23.66
47.09
Namibia
7.07
29.64
63.29
Seychelles*
2.09
15.42
82.49
South Africa
2.39
27.58
70.03
Swaziland*
7.48
47.69
44.83
Tanzania
27.00
25.18
47.82
Zambia
17.68
37.25
45.07
Zimbabwe
12.38
31.29
56.33
SADC (simple average)
14.07
30.74
55.19
In spite of efforts to increase trade within SADC, intra-regional trade has stagnated at a relatively low level. Data from the International Trade Centre and the World Trade Organisation (UKAID, 2014) for 2010 reveal that intra-SADC trade shares are distributed highly unevenly among its member states, ie, some countries benefit more than others from intra-regional trade in SADC. South Africa dominates intra-SADC exports with the lion’s share – approximately 68.1%.
Comparing the 2003 to 2013, agricultural sector shrank by two percentage point and the services sector, increased by two percentage point. In Asia services sector grew at a much higher rate (GIZ)

11. Angola GDP: consistent growth but with high variances

12. Angola: Significant variations in the cost of borrowing – and expected returns

13. Tanzania: A solid track record of GDP growth, in distinct cycles

14. Tanzanian inflation is rising again
Tanzanian inflation is rising again.. With a threat of inflation, but is this risk worth the potential growth benefits?

15. Tanzanian growth has strongly followed interest rate cuts…

16. Angola GDP : strong relationship between GDP and interest rate

17. Botswana: indicators suggest inflation is firmly under control… and low interest rates are in place. With cheapest money in the region – what more can Bots do to encourage growth?

18. Botswana: GDP is ticking up again…

19. Botswana: unemployment running at 20% vs. 13% in Tanzania…

20. South Africa Economic Indicators
                                                 
Overview
Last
Reference
Previous
Range
Frequency
GDP Growth Rate
2.5 %
Jun/17
-0.6
-6.1 : 7.6
Quarterly
Unemployment Rate
27.7 %
Sep/17
27.7
21.5 : 31.2
Inflation Rate
5.1 %
4.8
0.2 : 20.7
Monthly
Interest Rate
6.75 %
Oct/17
6.75
5 : 23.99
Daily
Balance of Trade
4002 ZAR Million
5975
: 18731
Government Debt to GDP
51.7 %
Dec/16
49.3
27.8 : 51.7
Yearly
Positive Real interest rates : 1.65%,
Positive balance of trade – switch from historical deficits
Climbing and v. high unemployment rates and Government Debt

21. South African growth has been slow since the global crisis
South African growth has been slow since the global crisis.. With a mild recovery from recession

22. RSA inflation targeting policy is clear to see
RSA inflation targeting policy is clear to see.. But is it at the expense of growth?

23. RSA rates are still relatively low .. Compared to Tanzania

24. Despite the high unemployment, South African formal employment has doubled since 2002..

25. Chart shows where commentators derive their 6% growth rate target for RSA…

26. RSA Imports have risen despite a weak rand – what does this imply?

27. RSA Imports and exports

28. SA balance of trade has improved

29. Exports have also largely maintained their journey without seemingly being Rand affected?

30. RSA promotion to realise direct investment has been a great success

31. Nigeria vies with RSA as the largest African economy (81 million employed) … but it has hit a tough recession..
Average 4% per annum

32. Nigeria is just exiting from a tough recession.. But growth is limited

33. Nigerian Cost of debt has more than doubled, and inflation has only just begun to slow down… but at what cost to growth and households?

34. Nigeria currency follows the trend of SA Rand, but with 2 significant shocks

35. Nigeria commentary – a country stabilising after turmoil
Nigeria's consumer prices increased by 16% year-on-year in September 2017.
Surging inflation has accompanied falling growth and rising interest rates. With the base rate rising from just 6,25% to 14% in 5 years - 
 Nigeria's unemployment rate rose for the seventh straight quarter to 13.9 percent in the third quarter of It was the highest level since 5.10 percent in the fourth quarter of 2010. the number of unemployed rose to 11.2 million, employment rose at a much slower 0.6 percent to 69.5 million and the labour force increased 1 percent to 80.7 million
Q: How many of you have a home loan?
Nigerian housholds are now paying 130% more per month in the bond... Q: what do you think that does to spending on other items, the economy? 
Q: What else might be causing a problem for Nigerian trade and economic context?
Q: How Important is stability in supporting GDP growth?