JOHANNESBURG, (CAJ News) – ECONOMIC activity in Sub-Saharan Africa slowed in 2015 as gross domestic product decelerated to the lows last seen in 2009, but there was some bright spots where growth continued to be robust.
According to the World Bank on Monday, GDP growth averaged 3 percent, down from 4,5 percent in 2014.
The 2016 growth forecast remains subdued at 3.3 percent, way below the robust 6,8 percent growth in GDP that the region sustained in the 2003-2008 period. Overall, growth is projected to pick up in 2017-2018 to 4,5 percent.
Commodity price drops have lowered Africa’s terms of trade in 2016 by an estimated 16 percent, with commodity exporters seeing large terms-of-trade losses.
Across the region in 2016, the impact of this shock is expected to lower economic activity by 0.5 percent from the baseline, and to weaken the current account and fiscal balance by about 4 and 2 percentage points below the baseline, respectively.
However, a few bright spots, where growth continued to be robust, have emerged.
World Bank reported such countries are Ivory Coast, which saw a favorable policy environment and rising investment, as well as oil importers such as Kenya, Rwanda and Tanzania.
Among frontier markets, growth is expected to edge up in Ghana, driven by improving investor sentiment, the launch of new oilfields, and the easing of the electricity crisis. In Kenya, growth is expected to remain robust, supported by private consumption and public infrastructure investment.
The projected pickup in activity in 2017-2018 reflects a gradual improvement in the region’s largest economies – Angola, Nigeria, and South Africa – as commodity prices stabilize and growth-enhancing reforms are implemented.
World Bank projected Sub-Saharan Africa countries would continue to face low and volatile prices in global commodity markets but need better institutions for effective planning and coordination that could raise urban economic density and productivity, and spur the region’s transformation.
“With the trend of falling commodity prices, particularly oil and gas, it is time to accelerate all reforms that will unleash the growth potential of Africa and provide affordable electricity for the African people,” said Makhtar Diop, World Bank Vice President for Africa.
– CAJ News