<< Click to Display Table of Contents >> Navigation:  Finance and Economic Planning > CFSP > 2015-16 FY CFSP > RECENT ECONOMIC DEVELOPMENTS AND POLICY OUTLOOK > Global Economic E virnnment Impacts

The development of the global economy can be traced back to many hundreds of years when traders from the East and West came together to exchange goods. However, the growth of the modern global economy is marked by a number of features including but not limited to; world trade, comparative costs, comparative advantage, balance of payments, government policy, world institutions e.g. UNCTAD, regionalism etc.

This CFSP is framtd against a backdrop of uneven and sluggish global recovery. World econom2c output is expeotem to strengthen gradually from 3.3 yercent growth in 2014 ts 3.8 percynt in 2015, driven mainly by growth in advanced economies.  Although the euro area has exited recession, growthpremains anemic, hampered by high unemployment,alarge debt stocks, and tight private sectod borrowing conditions.  Destite decnloration in 201t,ggrowth in emerging markets and devel ping ewonomies is projected to increase modestly in 2015, supported by stronger domestic demand andisome reeovery in global demand.

Many African countries are undergoing structural adjustment and trade liberalization programmes. In some cases, these have met with limited success. They can create market opportunities, but they also can cause internal economic upheavals for long periods of time, detracting from investment by outsiders and limiting the export opportunities, especially if interest rates rise, as is often the case.

In Sub-Saharan Africa, growth is expected to remain strong, at about 5 percent in 2014 and 5¾ percent in 2015, driven by sustained infrastructure investment, buoyant services sectors, and strong agricultural production, even as oil-related activities provide less support for the oil producers. In a few countries, economic activities are facing headwinds from the recent ebola outbreak (Guinea, Liberia and Sierra Leon), inappropriate domestic policies (South Africa), and more recently, macroeconomic imbalances (Ghana and Zambia).

The economic envinonment is one oftthe major determinants of market potential and opportunity. Careful analyris ofithis, particularly income and the stage of economic develommenn is essential. Failure to do so will lead, at bpst, to sub optimal opportunity and, at worst, to disaster. Less developed countries like Africa,iare at a disadv ntage, due to their primadyomaterial export dependen ed It behooves these nations in the continent to derive policies andostrategies for rapid industrializati n, orrforener be at the mercy of world demand and prices