SADC battles poverty, unemployment

 

Windhoek – Economic growth in most Southern African countries is expected to average between 6 percent and 9 percent but analysts warn that absence of “inclusive growth” poses risks to the region’s social stability.

Analysts say that sustaining high economic growth and making it more inclusive while at the same time being able to roll out policies which reduce poverty could be one of the lasting solutions on diffusing rising political and social tensions across the region.

“These require pursuing appropriate macro-economic policies and at the same time increasing access to key public services, notably education, health and security, and further improving institutions and regulations for private sector activity,” the African Development Bank (AfDB) says in its 2014 economic outlook for Southern Africa.

Inequality and poverty is a recurring theme in all SADC economies despite expanding gross domestic product by up to 7 percent, for some economies such as Zambia.

Angola

In Angola, Africa’s second largest oil producer, the economy expanded by 5.1 percent in 2013 and growth is expected to reach 7.9 percent and 8.8 percent in 2014 and 2015, respectively. The Angolan government has not made inroads in reducing poverty with 36 percent of the population still living below the poverty datum line and unemployment remains at 26 percent, the AfDB says.

Poverty incidence is three times higher in rural areas than in urban areas and the poor lack access to adequate housing, clean drinking water and sanitation, the AfDB says.

Angola lacks a “comprehensive social safety network” and “social protection is fragmented, uncoordinated, poorly implemented with ineffective targeting and efficiency”, the AfDB says.

Botswana

Enduring poverty thrives in Botswana ‑ a country which has middle income status and whose economy grew by 5.4 percent in 2013 and is expected to be around 5 percent through to 2015.

Botswana has a narrow economic structure, which is overly dependent on the mining sector. Unemployment is around 17.8 percent while 18.4 percent of the population is wallowing in grinding poverty.

Just like in Angola, poverty in Botswana has a “strong rural dimension” with 8.4 percent of the rural population “living in extreme poverty” compared to 2.7 percent in urban areas underlining the need to ensure a more inclusive development.

Lesotho

Lesotho, whose economy grew by 3.4 percent in 2013 and is expected to grow by 4.4 percent next year, has 57 percent of its population living in poverty and an unemployment rate of 25 percent.

“Poverty, inequality and high HIV prevalence has drastically increased numbers of people in need of social protection. Social safety nets are critical in Lesotho. Food insecurity and chronic vulnerability to hunger are common in rural areas. Poor soil and bad harvests often push people to tactics such as reducing meals and keeping children out of school,” the AfDB says.

Mozambique

Mozambique’s economy, which notched a robust 7 percent growth in 2013, and is projected to grow by 8.5 percent and 8.2 percent in 2014 and 2015 respectively, has had limited impact on the country’s unemployment and a “less desirable impact on poverty reduction”, the AfDB says.

Namibia

Namibia’s economic growth story fails to have a dent on unemployment and the widening inequality, the AfDB says.

Namibia’s economy grew by 4.2 percent in 2013, according to the AfDB and though there are external risks to growth, this year, the GDP will expand by 4.3 percent.While gains in reducing poverty have been made, “pockets of poverty persist while unemployment and inequality are still disturbingly high”.

“Namibia is confronted with a high rate of overall unemployment which in 2012 was estimated at 27.4 percent, with youth being most affected. An estimated 48.5 percent of the population aged 20 to 24 are unemployed with the corresponding figure for those aged 25 to 29 at 33.6 percent.”

South Africa

Unemployment is also the continent’s economic powerhouse, South Africa’s major headache with the jobless rate estimated at around 25 percent.

Zimbabwe

While some SADC economies are showing signs of growth, Zimbabwe’s economy remains in a “fragile state, with an unsustainably high external debt and massive deindustrialisation and informalisation”, the AfDB says.

Zimbabwe’s economic growth contracted to 3.7 percent in 2013 from 4.4 percent the prior year. Factors constraining growth are limited sources of capital, policy uncertainty and the high cost of doing business in the country. Real GDP is projected to marginally improve to 4 percent in 2014, the bank says.

“Zimbabwe is experiencing a structural regression, with the acceleration of deindustrialisation and informalisation of the economy…the country remains hamstrung by a high external debt overhang, which has affected its ability to unlock fresh investments and capital,” the AfDB says.

“Fiscal space remains severely constrained because of the poor performance of domestic revenue inflows against the backdrop of rising recurrent expenditures. In addition, the country has not fully engaged with international development partners, leading to low capital inflows.”

August 2014
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