Felix Nkambeh Tih
06 October 2015•Update: 06 October 2015
ANKARA
Sub Saharan Africa’s economic growth is likely to slow down to 3.7 percent in 2015 as opposed to 4.6 percent in 2014 because of “effects of difficult global conditions and domestic challenges” of some countries, the World Bank has predicted.
The slowdown is also due to the sharp fall in oil prices, copper and iron ore. It is also due to the slowdown of the Chinese economy and tighter global financial conditions, the World Bank said in a report titled "Africa's Pulse" released late Monday.
“The region’s commodity exporters — especially oil producers such as Angola, Equatorial Guinea, Nigeria, and the Republic of Congo, but also producers of minerals and metals, such as Botswana and Mauritania — are seeing setbacks to growth," the report said.
Countries such as "South Africa and Zambia, are compounded by domestic factors notably electricity supply bottlenecks. In other cases, political and social tensions are taking a toll on economic activity [Burundi and South Sudan]," it added.
Meanwhile, “several countries, such as Ivory Coast, Ethiopia, Mozambique, Rwanda, and Tanzania, are bucking the weakening regional trend and continuing to post robust growth”. According to the report these countries may maintain an annual growth of at least 7 percent from 2015 to 2017 thanks to investments in large-scale projects in energy, transport and mining sectors, and due to higher household consumption.
Economic activity in the region is expected to accelerate in 2016 and in 2017 it should also be supported by the gradual rise in commodity prices, adoption of less restrictive fiscal policies and government efforts to produce more electricity, the report added.
“The good news is that domestic demand generated by consumption, investment, and government spending will nudge economic growth upwards to 4.4 percent in 2016, and to 4.8 percent in 2017,” Punam Chuhan-Pole, acting chief economist, World Bank Africa region, said.
The World Bank also said that Sub Saharan governments should make more structural reforms, including building resiliency in the power sector and embark on tax reforms to boost revenue that can support economic growth and reduce poverty.
