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Pan-African economic expansion stays at solid rate

Staff writer |
The Pan-African economy continued to expand at a solid rate during November, according to the latest survey data from World Economics.

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The Headline Sales Managers’ Index (SMI) – a composite indicator providing the most up-to-date monthly assessment of economic activity across the region – registered 60.1, unchanged from its value in October, and signalling a sustained overall improvement in business conditions.

Readings above 50.0 indicate an overall improvement in business conditions, below 50.0 an overall deterioration.

Given its larger relative size, Nigeria remained the main contributor to Africa’s economic expansion, despite seeing its rate of growth ease to an eight-month low.

Weaker rises in economic activity were also registered in Egypt and South Africa while Algeria reported the first deterioration in business conditions since the panel started in 2013.

Security issues, energy shortages, unfavourable exchange rates, capital controls, falling direct investment and declining oil prices were cited by panellists as key reasons for the general slowdown in activity.

Sector analysis data indicated that the November Manufacturing SMI posted 55.9 while the Services SMI registered 58.7. These index figures showed slower but on-going robust growth in both sectors of the Pan-African economy.

The Business Confidence Index, which measures how Sales Managers’ expect the economy to perform over the coming months, posted 74.8, down from 75.3 in October. Furthermore, the current index value remained well above the series 43-month average, with the majority of panellists expecting a continued expansion in both sales and market growth.

Companies in Nigeria and Egypt were the most upbeat while companies in Algeria and South African were the least positive.