Africa’s economic growth rebounds at a slow pace – World Bank

Albert Zeufack, World Bank Africa Region Chief Economist, and Punam Chuhan-Pole, World Bank Africa Region Lead Economist, and author of Africa’s Pulse during the 2018 WBG-IMF Spring Meetings. Photo: Dasan Bobo/World Bank

The World Bank is projecting Sub-Saharan Africa’s economic growth to reach 3.1% in 2018 compared to 2017 decline.

Projected growth forecasts according to the World Bank, are premised on expectations that oil and metals prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment.

This was revealed in the bank’s Africa’s Pulse report, a bi-annual analysis of the state of African economies which was released Wednesday April 18, 2018.

Africa’s Sub-Saharan region’s growth will not be fast enough as the Pulse projects that the growth in 2018 will be sustained and averaged at 3.6% going into 2019-20

Albert G. Zeufack, World Bank Chief Economist for the Africa Region commenting on the report stated that, “Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels”

According to Mr. Zeufaack, African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth.”

“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,” Punam Chuhan-Pole, World Bank Lead Economist and the author of the report said.

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The 2018 Africa Pulse report showed that, moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa while 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 the report said.

Meanwhile, 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.

One of the challenges of the region which needs urgent attention according to the report is the rising public debt as 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013.

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.

World Bank Chief Economist for the Africa Region Mr. Zeufack admonishes that, “by fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth.”

This issue of Africa’s Pulse has a special focus on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction. The report finds that achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems. Improving regulation of the electricity sector and better management of utilities remain key to success.

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Links to the report English: http://documents.worldbank.org/curated/en/292931523967410313/Africas-pulse

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