Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 16

BRIEFS: NORTH AFRICA
Economic growth in Africa is on
the upswing
Economic growth in Sub-Saharan Afri-
ca is rebounding in 2017 after registering
the worst decline in more than two dec-
ades in 2016, according to Africa’s Pulse.
The region is showing signs of recovery,
and regional growth is projected to reach
2.6% in 2017.
However, the recovery remains weak,
with growth expected to rise only slight-
ly above population growth, a pace that
hampers efforts to boost employment and
reduce poverty.
Nigeria, South Africa, and Angola, the
continent’s largest economies, are seeing
a rebound from the sharp slowdown in
2016, but the recovery has been slow due
to insufficient adjustment to low com-
modity prices and policy uncertainty.
Furthermore, several oil exporters in
the Central African Economic and Mone-
tary Community (CEMAC) are facing eco-
nomic difficulties.
The latest data reveal that seven coun-
tries (Côte d’Ivoire, Ethiopia, Kenya, Mali,
Rwanda, Senegal, and Tanzania) continue
to exhibit economic resilience, support-
ed by domestic demand, posting annual
growth rates above 5.4% in 2015-2017.
These countries house nearly 27% of
the region’s population and account for
13% of the region’s total GDP.
The global economic outlook is im-
proving and should support the recovery
in the region.
Africa’s Pulse, a bi-annual analysis of
the state of African economies conducted
by the World Bank, notes that the conti-
14 Business Times Africa 2017
nent’s aggregate growth is expected to rise
to 3.2% in 2018 and 3.5% in 2019, reflecting
a recovery in the largest economies.
It will remain subdued for oil exporters,
while metal exporters are projected to see a
moderate uptick.
GDP growth in countries whose econo-
mies depend less on extractive commodi-
ties should remain robust, underpinned by
infrastructure investments, resilient servic-
es sectors, and the recovery of agricultural
production.
This is especially the case for Ethiopia,
Senegal, and Tanzania.
A stronger-than-expected tightening of
global financing conditions, weaker im-
provements in commodity prices, and a
rise in protectionist sentiment represent
downside external risks to the outlook.
On the domestic front, risks to the cur-
rent recovery stem from an inadequate
pace of reforms, rising security threats,
and political volatility ahead of elections in
some countries.
Albert G. Zeufack, World Bank Chief
Economist for the Africa Region, said: “As
countries move towards fiscal adjustment,
we need to protect the right conditions for
investment so that Sub-Saharan African
countries achieve a more robust recovery.”
“We need to implement reforms that in-
crease the productivity of African workers
and create a stable macroeconomic envi-
ronment. Better and more productive jobs
are instrumental to tackling poverty on the
continent,” he said.
The environment of weak economic
growth comes at a time when the conti-
nent is in dire need of necessary reforms to
boost investment and tackle poverty.
Countries also have to undertake
much-needed development spending
while avoiding increasing debt to unsus-
tainable levels.
In this environment, fostering public
and private investment, notably in infra-
structure, is a priority.
The region experienced a slowdown in
investment growth from nearly 8% in 2014
to 0.6% in 2015.
The Africa’s Pulse report dedicates a
special section to analyzing the region’s
infrastructure performance across sectors,
revealing dramatic improvements in quan-
tity and quality of telecommunications
contrasted by persistent lags in electricity
generation and access.
“With poverty rates still high, regaining
the growth momentum is imperative,” said
Punam Chuhan-Pole, World Bank Lead
Economist and the author of the report.
“Growth needs to be more inclusive and
will involve tackling the slowdown in in-
vestment and the high trade logistics that
stand in the way of competitiveness,” he
said.
Overall, the report calls for the urgent
implementation of reforms to improve in-
stitutions that foster private sector growth,
develop local capital markets, improve in-
frastructure, and strengthen domestic re-
source mobilization.