19 Apr 2018

The economic outlook for Sub-Saharan Africa is anticipated to be positive over the medium future with the continental economy expected to grow over 2018 and 2019.

According to Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, which was released on April 18, the average Sub-Saharan economy is projected to grow by 3.1 per cent, and reach an average of 2019-20.

Presenting the report in a press conference telecast to African journalists in their various capitals from Washington D.C. in the United States, World Bank chief economist for the African Region, Mr Albert Zeufack, said the projections were premised on commodity prices remaining stable. 

He said after African economies were affected by the global collapse in commodity prices, the growth experienced after the stabilising of such commodity sales had revived growth, but African governments still needed to address macroeconomic imbalance and boost investment.

“Growth has rebounded in Sub-Saharan Africa, but not fast enough. 

We are still far from pre-crisis growth levels. African governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth,” Mr Zeufack said.

According to the report, the modest speed of economic expansion was consequent to the gradual recovery in growth in the region’s three largest economies; Nigeria, Angola and South Africa. Economic activity elsewhere would pick up in some metals exporters, with the rise in mining production and investment.

“Among non- resource intensive countries, solid growth, supported by infrastructure investment, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal. 

Growth prospects have strengthened in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth; in Ethiopia, growth will remain high, as government-led infrastructure investment continues,” Mr Zeufack.

For Ms Punam Chuhan-Pole, World Bank lead economist and the author of the report, African economies were vulnerable to the fluctuations in commodity prices, and ‘this underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda’.

Another problem identified by the World Bank was the rise in public debt relative to the gross domestic product (GDP), and how the composition of debt has changed, with countries shifting from traditional sources of financing toward more market-based ones. The report also underscored the need for governments to work on innovative methods of accelerating electrification in Sub-Saharan Africa in order to achieve inclusive economic growth and poverty reduction. 

The African media, posing questions from the country centres of the World Bank in various African capitals, including Gaborone, expressed concern about the World Bank encouraging African governments to pursue loans, and not radically addressing the self-reliance of African states by actively encouraging policy choices that lead to industrialisation as well as large scale hydro-electric, coal-fired and thermal power electrification. ENDS