Economic growth in Africa rebounds, but not fast enough -Sub-Saharan Africa projected to reach 3.1 percent in 2018 and to average 3.6 percent for the period, 2019-2020
Africa is showing signs of economic growth but the growth is not fast enough, the World Bank has stated.
This was the general feeling at the recent launch of Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, held in Gaborone, Botswana recently.
The launch of the 2018 issue of Africa’s Pulse focused on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications for achieving inclusive economic growth and poverty reduction.
Speaking at the event, World Bank Chief Economist for the Africa Region, Albert G. Zeufack said the Sub-Saharan Africa’s economic growth is projected to reach 3.1 percent in 2018, and to average 3.6 percent in 2019–2020.
The growth forecasts are premised on expectations that oil and metals prices would remain stable, and that governments in the region would implement reforms to address macroeconomic imbalances and boost investment.
“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said the Chief Economist who further stated that African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth as well as fully embrace technology and leveraging innovation, something, he said, could boost productivity across and within sectors, and accelerate Africa’s much needed economic growth.
Part of a statement from the World Bank reads, “The moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa. Elsewhere, economic activity will pick up in some metals exporters, as mining production and investment rise.”
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,” the statement continues.
Speaking to the topic, Author of the report and World Bank Lead Economist, Punam Chuhan-Pole said for many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production.
“This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda,” said Chuhan-Pole.
The leading economist noted that public debt relative to GDP is rising in the region, and the composition of debt has changed as countries have shifted away from traditional concessional sources of financing toward more market-based ones.
“Higher debt burdens and the increased exposure to market risks raise concerns about debt sustainability as 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013,” she revealed.