By Benjamin Orisemeke
Multinational institution, World Bank has cut its growth forecast sub-Saharan Africa in 2018 from 3.1 per cent to 2.7 per cent.
This represents a slight increase from 2.3 per cent in 2017.
According to the World Bank in its October edition of the African Pulse, which is a bi-annual analysis of the state of African economies, stated that the October projection is partly due to less than favourable external environment for the region.
At the presentation of the report, World Bank Chief Economist for Africa, Albert Zeufack, said the region’s economic recovery was in progress but at a slower pace than expected.
According to Mr. Zeufack policymakers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity to accelerate and sustain an inclusive growth momentum.
“Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt,” he said.
The report stated that “The slower pace of the recovery in sub-Saharan Africa (0.4 percentage points lower than the April forecast) is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa,” said the World Bank.
The lender said growth in the region — excluding Angola, Nigeria and South Africa — was steady, noting that several oil exporters in central Africa were helped by higher oil prices and an increase in oil production.
According to the World Bank, economic activity remained solid in fast-growing non-resource-rich countries, such as Cote d’Ivoire, Kenya, and Rwanda.
These were supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.
The lender warned that public debt remained high and continues to rise in some countries.
The lender noted that vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk.
The World Bank said lower oil production in Angola and Nigeria offset higher oil prices, and in South Africa, weak household consumption growth was compounded by a contraction in agriculture.
