Growth in Sub-Saharan Africa slower than expected

By
Morkporkpor Anku, GNA

Accra, Oct. 3, GNA – The World Bank says
Sub-Saharan African economies are still recovering from the slowdown in
2015-16, but growth is slower than expected.

The average growth rate in the region is
estimated at 2.7 percent in 2018, which represents a slight increase from 2.3
percent in 2017.

Mr Albert Zeufack, World Bank Chief Economist
for Africa, launching the October 2018 issue of Africa’s Pulse said Africa
was estimated to grow at an average rate of 3.1 per cent in 2019 and 3.6 per
cent in 2020.

He said African governments needed to sustain
reforms to ensure that they continued to grow the economy as projected.

The Africa’s Pulse is a bi-annual analysis of
the near-term macroeconomic outlook for the Africa Region.

Mr Zeufack said governments could not be
complacent with the level of growth, because the road to the recovery would not
be easy.

He urged policy makers to focus on leveraging
on innovation and technology to grow their economies. 

Mr Zeufack said the “region’s economic recovery
is in progress but at a slower pace than expected.”

He said to accelerate and sustain an inclusive
growth momentum, policy makers must continue to focus on investments that
foster human capital, reduce resource misallocation and boost productivity.

He said policymakers in the region must equip
themselves to manage new risks arising from changes in the composition of
capital flows and debt.

“Slow growth is partially a reflection of a
less favourable external environment for the region,” he added.

He said the Global trade and industrial
activity lost momentum, as metals and agricultural prices fell due to concerns
about trade tariffs and weakening demand prospects.

Mr Zeufack said while oil prices were likely
to be on an upward trend into 2019, metals prices may remain subdued amid muted
demand, particularly in China.

He said the financial market pressures
intensified in some emerging markets and concern about their dollar-denominated
debt has risen amid a stronger US dollar.

He said the slower pace of the recovery in
Sub-Saharan Africa (0.4 percentage points lower than the April forecast) was
explained by the sluggish expansion in the region’s three largest economies,
Nigeria, Angola, and South Africa.

The Chief Economist said lower oil production
in Angola and Nigeria offset higher oil prices, and in South Africa, weak
household consumption growth was compounded by a contraction in
agriculture. 

“Growth in the region excluding Angola,
Nigeria and South Africa is steady; several oil exporters in Central
Africa were helped by higher oil prices and an increase in oil production,” he
added.

He said economic activity remained solid in
the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya, and
Rwanda, supported by agricultural production and services on the production
side, and household consumption and public investment on the demand side.

On public debt, Mr Cesar Calderon, Lead
Economist and Lead author of the report said debt remained high and continued
to rise in some countries.

He said vulnerability to weaker currencies and
rising interest rates associated with the changing composition of debt may put
the region’s public debt sustainability further at risk.

He said other domestic risks included fiscal
slippage, conflicts, and weather shocks, consequently, policies and reforms
were needed that could strengthen resilience to risks and raise medium-term
potential growth.

He said Africa’s Pulse highlighted sub-Saharan
Africa’s lower labour productivity and potentials for improvement “Reforms
should include policies, which encourage investments in non-resource sectors,
generate jobs and improve the efficiency of firms and workers.”

GNA

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