The World Bank has revised its growth forecast for sub-Saharan Africa in 2018 from 3.1 percent to 2.7 percent, indicating a slight increase from 2.3 percent in 2017.
The Breton Woods institution made the latest forecast in its October edition of the African Pulse, a bi-annual analysis of the state of African economies
It stated that the October projection was partly due to less than favourable external environment for the region.
Commenting at the presentation of the report, the World Bank’s Chief Economist for Africa, Albert Zeufack, noted that the region’s economic recovery was in progress but at a slower pace than expected.
According to him, in order to boost the performance of the sub-Saharan African economies, policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity to accelerate and sustain an inclusive growth momentum.
He canvassed further: “Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt.”
The report stated further 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.”
The global financial institution reported that 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 bank, economic activity remained solid in fast-growing non-resource-rich countries, such as Cote d’Ivoire, Kenya, and Rwanda.
It reported these positive tractions were supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.
The bank warned that public debt remained high and continued to rise in some countries, noting further 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 multilateral financial institution reported further that 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.
