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City of Banjul
Friday, September 25, 2020

Global uncertainty continues to slow growth in Africa’s economies

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Initiatives to empower poor people,
girls and women are essential to progress
Growth in Sub-Saharan Africa remained slow through 2019, hampered by persistent uncertainty in the global economy and the slow pace of domestic reforms, according to the 20th edition of Africa’s Pulse, the World Bank’s twice-yearly economic update for the region. Overall growth in Sub-Saharan Africa is projected to rise to 2.6 percent in 2019 from 2.5 percent in 2018, which is 0.2 percentage points lower than the April forecast. This edition of Africa’s Pulse includes special sections on accelerating poverty reduction and promoting women’s empowerment. “Empowering women will help boost growth.

African policy makers face an important choice: business as usual or deliberate steps toward a more inclusive economy,” said Hafez Ghanem, World Bank Vice President for Africa. “After several years of slower-than-expected growth, closing the opportunity gap for women by removing barriers to their economic participation is the best way forward.” Global uncertainty is taking a toll on growth well beyond Africa, and real GDP growth is also expected to slow significantly in other emerging and developing regions. The Middle East and North Africa, Latin America and Caribbean, and South Asia regions are expected to see even larger downward revisions in their growth forecasts than in Sub-Saharan Africa for 2019. Beyond Sub- Saharan Africa’s regional averages, the picture is mixed. The recovery in Nigeria, South Africa, and Angola, the region’s three largest economies—has remained weak and is weighing on the region’s prospects. In Nigeria, growth in the non-oil sector has been sluggish, while in Angola the oil sector remained weak. In South Africa, low investment sentiment is weighing on economic activity. Excluding Nigeria, South Africa, and Angola, growth in the rest of the subcontinent is expected to remain robust although slower in some countries.

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The average growth among non-resource-intensive countries is projected to edge down, reflecting the effects of tropical cyclones in Mozambique and Zimbabwe, political uncertainty in Sudan, weaker agricultural exports in Kenya, and fiscal consolidation in Senegal. In Central African Economic and Monetary Community countries, which are also resource-intensive, activity is expected to expand at a modest pace, supported by rising oil production. Growth among metals exporters is expected to moderate, as mining production slows and metal prices fall.“Africa’s economies are not immune to what is happening in the rest of the world, and this is reflected in the subdued growth rates across the region,” said Albert Zeufack, Chief Economist for Africa at the World Bank. “At the same time, evidence clearly links poor governance to poor growth performance, so efficient and transparent institutions should be on the priority list for African policy makers and citizens.”

Accelerating poverty reduction
and empowering women
Four in ten Africans, or over 416 million people, lived below $1.90 per day in 2015. Absent significant efforts to create economic opportunities and reduce risk for poor people, extreme poverty will become almost exclusively an African phenomenon by 2030. According to Africa’s Pulse, the poverty agenda in Africa should put the poor in control, helping to accelerate the fertility transition, leverage the food system on and off the farm, address risk and conflict, and provide more and better public finance to improve the lives of the most vulnerable. A critical piece will be addressing gender gaps in health, education, empowerment, and jobs. Sub-Saharan Africa is the only region in the world that can boast that women are more likely to be entrepreneurs than men, and African women contribute to a large share of agricultural labor across the continent. This success is stifled by large and persistent earnings gaps between men and women. Women farmers in Sub-Saharan Africa produce 33 percent less per hectare of land than men do, and female entrepreneurs or business owners earn 34 percent less profits than male business owners. These earnings gaps are very costly to African people and economies. Africa’s Pulse identifies six policy pathways for women’s economic empowerment: 1. building women’s skills beyond traditional training; 2. alleviating women’s financial constraints through innovative solutions that relieve the collateral problem and improve their access to the financial sector; 3. helping women secure their land rights; 4. connecting women to labor; 5. addressing social norms that constrain women’s opportunities; and 6. building a strong new generation by helping girls to navigate their adolescence.

The currency markets

*** These are indicative figures as per the 2nd. January, 2020.
The commodity markets in the Greater Banjul Areas

*** Market prices are as at 02nd. January, 2020

Women finance

Eliminating gender disparities in business
performance in Africa: supporting women-owned firms
While women entrepreneurs are a vital and vibrant source of economic growth across Sub-Saharan Africa, a new World Bank analysis shows that women-owned businesses consistently perform worse than businesses owned by men due to gender-specific limitations. Drawing on a wealth of new, high-quality household and firm-level data from multiple countries, ‘Profiting from Parity: Unlocking the Potential of Womens Businesses in Africa shows that women entrepreneurs face constraints such as social norms, unequal legal frameworks, and differences in education, resources, assets and networks. These factors negatively influence decision making, the report notes, hurting women’s business performance and stunting economic growth. While gender gaps vary widely, the report finds that on average, these constraints cause women entrepreneurs to have lower profits, fewer employees, and lower sales. “While entrepreneurs across the continent face a variety of constraints to starting, operating, and growing their businesses, the extent of the challenges facing female entrepreneurs is even greater,” said Hafez Ghanem, Vice President for the World Bank’s Africa Region. “By focusing on alleviating the specific constraints confronted by female entrepreneurs, governments can not only improve the business enabling environment, but also broaden the benefits of private sector development.” Based on this analysis, the report offers decision makers a menu of options and evidence-based guidance on designing programs to target multiple constraints and improve the performance of women entrepreneurs. The report highlights several areas as promising to empower female entrepreneurs, including:

Facilitating access to capital
Drawing on data from 14 impact evaluations, the report finds that capital investment is more than six times higher in the average male-owned firm than the average female-owned firm. Women’s ability to finance their business activities is also undermined by the additional pressures they face (relative to men) to spend their income on domestic needs. Rigorous evidence shows that supporting women with secure savings mechanisms and providing large cash grants as part of business plan competitions help to promote savings and relax capital constraints among female-owned, growth-oriented firms. Other promising interventions recommended for additional study include strengthening women’s land tenure rights to increase their access to collateral and introducing financial innovations that reduce collateral requirements.

Great entrepreneurial quotes of the week
1. Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.
By–Ayn Rand

2. Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.
By–Dave Ramsey

3. It is not the man who has too little, but the man who craves more, that is poor.
By–Seneca

4. It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.
By–Henry Ford

5. He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all.
By–Eleanor Roosevelt
6. Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.
By–Franklin D. Roosevelt
7. Empty pockets never held anyone back. Only empty heads and empty hearts can do that.
By–Norman Vincent Peale
8. It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.
By–George Lorimer

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