The World Bank has revealed that economic growth in Sub-Saharan Africa is rebounding this year after registering the worst decline in more than two decades last year.
According to the latest Africa’s Pulse, which is the World Bank’s bi-annual analysis of the state of African economies, the region is showing signs of recovery, and regional growth is projected to reach 2.6% in 2017.
The Bank however says 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 continent’s largest economies; Nigeria, South Africa, and Angola 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.
Commenting on the latest report, the World Bank’s Chief Economist for the Africa Region, Albert Zeufack stressed the need to protect the right conditions for investment so that Sub-Saharan African countries achieve a more robust recovery.
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,” the data stated.
Further rise in economic growth in next two years
Meanwhile Africa’s Pulse 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.
This is however expected to 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.
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.
Among the recommendations offered by Africa’s include;
That the countries have to undertake much-needed development spending while avoiding increasing debt to unsustainable levels.
That the countries must pursue urgent implementation of reforms to improve institutions that foster private sector growth, develop local capital markets, improve infrastructure, and strengthen domestic resource mobilization.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana