Average economic growth in the Sub-Saharan region of the African continent increased to 2.7% in 2018, slightly higher than 2.3% in 2017, a new report has revealed.
According to the recent Africa’s Pulse - a bi-annual analysis of the state of African economies by the World Bank - the rate of growth in the region is moving in a positive direction though at a much slower rate than initially anticipated.
“The region’s economic recovery is in progress but at a slower pace than expected. To accelerate and sustain an inclusive growth momentum, policymakers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity. Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt,” Albert Zeufack, World Bank Chief Economist for Africa, stated.
However, the report did highlight that the Sub-Saharan region’s recovery from the 2015-2016 economic decline is positive, irrespective of the snail’s pace progression attributed to ‘sluggish expansion’ in the region’s three largest economies: Nigeria, South Africa and Angola.
“Slow growth is partially a reflection of a less favorable external environment for the region. Global trade and industrial activity lost momentum, as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects,” Zeufack explained.
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.
“While oil prices are likely to [keep] on an upward trend in 2019, metals prices may remain subdued amid muted demand, particularly in China. Financial market pressures intensified in some emerging markets and concern about their dollar-denominated debt has risen amid a stronger US dollar,” the economist added.
Meanwhile, Cote d’Ivoire, Kenya and Rwanda have been experiencing positive economic activity supported by agricultural production and public investment.
Africa’s Pulse added that more investment in workers, non-resource and job sectors is still a major requirement for sustainable growth in the Sub-Saharan region.