Much of Ethiopia s success is

African economy news

Lady walking past mine in South AfricaImage copyright Getty Images

2015 was a tough year for African economies.

But many of the problems of 2015 could get worse this year, from lack of demand for the continent's commodities, to lack of rain, from falling currencies to political instability.

The editor of BBC Africa's Business Report, Matthew Davies, takes a look at the prospects for African economies in 2016:

Commodities

Image caption Glencore has laid off 4, 300 workers at its Mopani copper mine in Zambia

Prices for Africa's commodities fell sharply in 2015 and are not expected to see much of a recovery this year. This has had widespread economic effects across the continent.

In Zambia, the country's main export, copper, now sells for less than half than it did just three years ago.

Some mining companies have even halted production and laid off workers. It's led to a plunge in the currency, the kwacha, and a rise in inflation which is expected to continue.

And several African countries, including the big oil producers like Nigeria and Angola, are in the same boat. Expect a few countries to call on the International Monetary Fund (IMF) for help this year.

China

Image copyright Getty Images Image caption China's stock market has had a terrible start to the year

Much of the fall in the prices of commodities is down to China. As its economy has slowed, demand for the metals and minerals in African soils has reduced dramatically.

The knock-on effect of this has translated not just into commodity price falls, but also to job losses and a fall in tax revenues gathered by some African governments.

If, as one would expect, things continue on this path, we can expect African governments to either cut public spending or increase taxes, or both.

The turmoil in Chinese markets since the beginning of the year is also a cause for concern. The more the giant Chinese economy stumbles around in search of a good footing and clear direction, the more African governments need to take measures to make sure that China's economic problems don't become their own.

Currencies

Image copyright AP Image caption There are fears Nigeria may have to devalue its currency due to low oil prices

China's economic situation and the resultant fall in commodity prices has also led to a collapse of the values in many African currencies.

Source: www.bbc.co.uk
RELATED VIDEO
The Model African State in a Global Economy - Part 1
The Model African State in a Global Economy - Part 1
News Update: South Africa strike threatens economy
News Update: South Africa strike threatens economy
Africa Economy Report 2 of 3 - Energy Crisis - BBC News
Africa Economy Report 2 of 3 - Energy Crisis - BBC News
RELATED FACTS
Share this Post

Related posts

African economy 2014

African economy 2014

DECEMBER 15, 2017

Moderator: Mr. Daniel Makokera, CEO, Pamuzinda Productions Guest Speaker: Mr. Pascal Lamy, former Director General, WTO Opening…

Read More
Chad African economy

Chad African economy

DECEMBER 15, 2017

Economic growth in Chad stood at 7.2% in 2014, according to estimates, and could reach 9% in 2015 due to the start of production…

Read More