Sub-Saharan Africa’s economic projections for 2018 look brighter with growth levels pegged at 3.2 percent for 2018 up from 2.4 percent recorded for 2017.
The World Bank’s Global Economic Prospects report released this month indicates that the modest recovery is supported by an improvement in commodity prices although growth rebounded in Angola, Nigeria, and South Africa— the region’s largest economies.
The forecast ventures that growth levels will remain below the rates seen prior to the global financial crisis despite the pickup partly reflecting the struggle faced by the region’s larger economies to boost private investment.
Outside the three largest economies, among oil exporters, growth is forecast to strengthen in Ghana, as exports in oil and gas production soar.
Economic activity is expected to remain solid with Côte d’Ivoire and Senegal expanding at a rapid pace.
Ethiopia is projected to remain the fastest growing economy among East African countries. However, growth is expected to take some downsides as it’s government is taking measures to stabilize debts.
For two of the region’s largest economies, South Africa and Nigeria, growth is expected to pick up to 1.1 percent and 2.5 percent in 2018 respectively.
On a whole, 2018 economic outlook looks promising for the region but not without risks.
The report suggests excessive borrowing could pile up debts which would lead to economic instability in the region.
Additionally, long period of increasing political tensions and policy uncertainty could further reduce confidence and deter investments in countries like South Africa where its ruling African National Congress’s leadership election could lead to division among party members and also in Zimbabwe where an election is in the offing.
In fragile countries, droughts, conflicts and worsening conditions would affect economic activities, according to the report.
With the above projections, it recommends that countries make fiscal adjustment to contain fiscal deficits and maintain financial stability.
The report further recommends an improvement in the education and health sectors and labour market could strengthen potential growth in the region.