Economic growth in sub-Saharan Africa is likely to slip to 1.6 per cent this year, its lowest level in two decades, due to continuing woes in the continent’s largest economies, South Africa and Nigeria, a World Bank report said yesterday.
Africa has been one of the world’s fastest growing regions over the past decade, but a commodities slump has hit its oil and mineral exporter’s hard, bringing growth down to 3 per cent in 2015.
However, other countries, including Ethiopia, Rwanda, and Tanzania, have continued to record Gross Domestic Product (GDP) growth above 6 per cent, according to “Africa’s Pulse”, the Bank’s twice-yearly analysis of economic trends.
The report, which was unveiled in Ivory Coast’s commercial capital Abidjan, also singled out Ivory Coast and Senegal as top performers.
“Our analysis shows that the more resilient growth performers tend to have stronger macroeconomic policy frameworks, better business regulatory environment, more diverse structure of exports, and more effective institutions,” said World Bank’s chief economist for Africa, Albert Zeufack.
Established and improved performers made up around a quarter of sub-Saharan Africa’s countries, are home to 42 percent of its people, but account for just 21 percent of economic output. Meanwhile, 40 per cent of African economies are struggling.
They contain 36 per cent of the continent’s population but contribute 62 per cent of economic activity. Nigeria and South Africa alone account for half of output.
Despite a recent timid recovery in commodities, prices are expected to remain below their 2011-14 peak levels, the report said. As a result, growth is projected to pick up slightly to 2.9 per cent next year, the report said, and Africa’s economies are expected to expand by 3.6 per cent in 2018.
However, government spending on Africa’s agricultural sectors is still lagging behind developing regions, despite making up a third of GDP and two-thirds of employment.
“Improving the productivity of smallholder farms is central to lifting rural incomes and reducing poverty in sub-Saharan Africa,” said Punam Chuhan- Pole, lead economist for World Bank Africa, who wrote the report.
“But unleashing this productivity requires investing in rural public goods such as rural infrastructure, agricultural research, and use of improved technologies, as well as in availability of good data and evidence,” he added.
