WORLD BANK has released a
new favorable economic growth
outlook for Sub-Saharan Africa
as they said that it is rebounding
in 2017 after registering the worst
decline in more than two decades
in 2016. According to the new
Africa’s Pulse, a bi-annual analysis
of the state of African economies
conducted by the region is
showing signs of recovery, and
regional growth is projected to
reach 2.6% in 2017.
However, the recovery remains
weak, with growth expected to
rise only slightly above population
growth, a pace that hampers
efforts to boost employment and
reduce poverty.
The report observed that
Nigeria, South Africa, and Angola,
the continent’s largest economies,
are seeing a rebound from the
sharp slowdown in 2016, but the
recovery has been slow due to
insufficient adjustment to low
commodity prices and policy
uncertainty. Furthermore, several
oil exporters in the Central
African Economic and Monetary
Community (CEMAC) are facing
economic difficulties.
The latest data reveal that seven
countries (Côte d’Ivoire, Ethiopia,
Kenya, Mali, Rwanda, Senegal,
and Tanzania) continue to exhibit
economic resilience, supported by
domestic demand, posting annual
growth rates above 5.4% in 2015-
2017. These countries house nearly
27% of the region’s population and
account for 13% of the region’s
total GDP.
The global economic outlook is
improving and should support
the recovery in the region. Africa’sPulse notes that the continent’s
aggregate growth is expected
to rise to 3.2% in 2018 and 3.5%
in 2019, reflecting a recovery
in the largest economies. It
will remain subdued for oil
exporters, while metal exporters
are projected to see a moderate
uptick. GDP growth in countries
whose economies depend less on
extractive commodities should
remain robust, underpinned
by infrastructure investments,
resilient services sectors, and
the recovery of agricultural
production. This is especially the
case for Ethiopia, Senegal, and
Tanzania.
A stronger-than-expected
tightening of global financing
conditions, weaker improvements
in commodity prices, and a rise in
protectionist sentiment represent
downside external risks to the
outlook. On the domestic front,
risks to the current recovery
stem from an inadequate pace of
reforms, rising security threats,
and political volatility ahead of
elections in some countries.
“As countries move towards
fiscal adjustment, we need to
protect the right conditions for
investment so that Sub-Saharan
African countries achieve a more
robust recovery,” says Albert
G. Zeufack, World Bank Chief
Economist for the Africa Region.
“We need to implement reforms
that increase the productivity
of African workers and create
a stable macroeconomic
environment. Better and more
productive jobs are instrumental
to tackling poverty on the
continent.”
The environment of weak
economic growth comes at a time
when the continent is in dire need
of necessary reforms to boost
investment and tackle poverty.
Countries also have to undertake
much-needed development
spending while avoiding
increasing debt to unsustainable
levels.
In this environment, fostering
public and private investment,
notably in infrastructure, is a
priority. The region experienced
a slowdown in investment
growth from nearly 8% in 2014
to 0.6% in 2015. The Africa’s
Pulse report dedicates a special
section to analyzing the region’s
infrastructure performance
across sectors, revealing dramatic
improvements in quantity and
quality of telecommunications
contrasted by persistent lags in
electricity generation and access.
“With poverty rates still high,
regaining the growth momentum
is imperative,” says Punam
Chuhan-Pole, World Bank Lead
Economist and the author of the
report. “Growth needs to be more
inclusive and will involve tackling
the slowdown in investment and
the high trade logistics that stand
in the way of competitiveness.”

 


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