In 2014, commodity prices fell globally and some economist were quick to predicted doom for sub-Saharan Africa commodity driven economies.
With crude oil prices shedding more than half of its value in the last three months of the 2014 and other commodities like coffee, cocoa and sugar falling to their multi-month lows, it looked like most African countries, which had posted good growth rates over the past decade, would probably go into a tailspin.
A recent forecast on Africa by the International Monetary Fund (IMF), however, shows only little change is expected in the growth rate of most economies in the region in 2015 and 2016.
In the past, many African economies were heavily reliant on commodities to power economic growth, something that made them vulnerable to prices changes on the international market.
While the report shows that economic growth will fall in most countries, there are about a dozen, including Kenya, Tanzania, Ivory Coast, Ethiopia, Egypt and Mali, that are expected to benefit from the fall in oil prices.
In a review of the report the Economist says that a growing manufacturing, services and tourism sectors on the continent is compensating for the loss in commodities revenue
“Manufacturing output in the continent is expanding as quickly as the rest of the economy. Growth is even faster in services, which expanded at an average rate of 2.6 percent per person across Africa between 1996 and 2011,” the Economist reported.
“Tourism, in particular, has boomed: the number of foreign visitors doubled and receipts tripled between 2000 and 2012. All this means that even if income from commodity production slips, other parts of the economy can take up the slack.”
The IMF report forecasts that Africa largest economy Nigeria, which largely depends on oil export to meet its fiscal needs, will grow by 10 percent over the two years, down from an earlier prediction of 14 percent.
Only two commodities-dependant economies, Sierra Leone (which was hit by Ebola last year) and Equatorial Guinea, are expected to post negative growth over the next two years.