The World Bank has said in its recent report that economic growth in Sub-Saharan Africa would become stronger this year.
The World Bank has said in its recent report that economic growth in Sub-Saharan Africa would become stronger this year.
The average growth in the region was projected to increase to 5.2 percent during 2015-16 (up from 4.6 percent in 2014) and to 5.3 percent in 2017.
Some markets and industries were looking to be more promising than others but certain regional challenges continue to present unknown variables, the report said.
On Markets, the report noted that despite growth in the region generally remaining favourable, the differing fortunes of the region’s largest economies have moderated that growth.
Economic activity in Nigeria remains robust with growth strengthening from 6.2 percent in the first quarter to 6.5 percent in the second quarter.
Low-income countries, including Cote d’Ivoire, Ethiopia, Mozambique, and Tanzania, also enjoyed healthy economicgrowth. In contrast, the economies of South Africa, Angola, and Ghana each experienced far more modest expansion, the report says.
On Industries, the primary drivers of growth were public infrastructure investment (e.g. power, ports, and transportation), “a rebound in agriculture,” and the services sector
(e.g., telecommunications, financial services, and tourism).
Importantly, the services sector has been “the big gainer” in the region’s economic transformation and presents “an important path” for economic diversification and accelerating poverty reduction.
However, weak global growth (and related factors) has resulted in a decrease in foreign direct investment, which is an important financing source for all of these industries.
The report further says the Ebola outbreak has ravaged economic activities in Guinea, Liberia, and Sierra Leone. Initial estimates are that the combined output loss to the countries could total $359 million, which would translate to a 3 percent drop in the GDP growth of Sierra Leone and a halving of the GDP growth of both Guinea and Liberia.
The world lender says the Ebola crisis must be addressed and the private sector should play a critical role. It says that regional spillover is projected to be modest and limited to Ghana and
Nigeria, which already has contained the outbreak. However, a slower containment presents a far direr scenario for the countries and the region.
The report concludes that regional disruptions may also result from further intensification of the conflict in South Sudan and/or the Boko Haram insurgency in Nigeria.
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