The International Monetary Fund has projected that the economy of sub-Saharan Africa will increase from 2.4 per cent in 2017 to 3.2 per cent in 2018, and then, 3.5 per cent by the end of 2019.
The bi-annual report of the global institution on the state of African economies, ‘Africa’s Pulse’, indicated that the economy of the continent was expected to see a moderate increase in its activities as commodity prices firm and domestic demand gradually gain ground, helped by slowing inflation and monetary policy easing.
It stated, “Growth will continue to multispeed across the region. In non-resource intensive countries such as Ethiopia and Senegal, growth remains broadly stable, supported by infrastructure investments and increased crop production. In metal exporting countries, an increase in output and investment in the mining sector amid rising metal prices have enabled a rebound in activity.
“Headline inflation slowed across the region in 2017 amid stable exchange rates and slowing food price inflation, due to higher food production. Fiscal deficits have narrowed, but continue to be high, as fiscal adjustment measures remain partial. As a result, government debt remains elevated. Across the region, additional efforts are needed to address revenue shortfalls and contain spending to improve fiscal balances.”
Chief Economist for Africa, World Bank, Mr. Albert Zeufack, said, “Most countries do not have significant wiggle room when it comes to having enough fiscal space to cope with economic volatility. It is imperative that countries adopt appropriate fiscal policies and structural measures now to strengthen economic resilience, boost productivity, increase investment, and promote economic diversification.”
However, the IMF added that growth prospects would remain weak in the Central African Economic and Monetary Community countries, as they struggled to adjust to low oil prices.
Also, the economic expansion in West African Economic and Monetary Union countries is expected to proceed at a strong pace on the back of solid public investment growth, led by Côte d’Ivoire and Senegal. Elsewhere, growth is projected to firm up in Tanzania on a rebound in investment growth and recovery in Kenya, as inflation eases. Ethiopia is likely to remain the fastest-growing economy in the region, although public investment is expected to slow
down.
“The outlook for the region remains challenging as economic growth remains well below the pre-crisis average,” World Bank Lead Economist and lead author of the report, Punam
Chuhan-Pole,
said.
“Moreover, the moderate pace of growth will only yield slow gains in per capita income that will not
be enough to harness broad-based prosperity and accelerate poverty reduction,” Chuhan-Pole
explained.
