Falling fixed investment and policy uncertainty in the global economy seems to have dented the economic growth of Sub-Saharan economy. The World Bank in its Africa’s Pulse report released on Wednesday down sized by 0.2 percentage its economic growth forecast for sub-Saharan Africa for 2019 to 2021 to 2.6% this year. It had projected a 2.8% growth in April. For 2020, it pegged the growth at 3.1% and 3.2% in 2021.
According to the 20th edition of Africa’s Pulse, the trade tensions between China and the United States, softening global growth, falling commodity prices, compounded by the slow pace of reforms in African countries, contributed to the sluggish growth of the region. In spite of some improvements, the Bank felt the external environment would continue to remain difficult and uncertain for the region. Factors like drought, security threats, increases in the cost of public borrowing and private investment etc., contributed to the declining growth of the region. The report pointed out that on the supply side, the manufacturing and mining industries recorded a modest expansion, while the services sector slowed down.
Around 60% of sub-Saharan Africa’s annual economic output come from Nigeria, South Africa and Angola. Economic recovery in these three largest economies has remained fragile the bank said. “In Nigeria, growth in the non-oil sector has been sluggish, while in Angola the oil sector has underperformed. In South Africa, low investment sentiment is weighing on economic activity,” said the World Bank. The report also said that the number of African countries in debt distress or in high risk of external debt distress had doubled, but the pace of deterioration had declined. The report implied that growth in the rest of sub-Saharan Africa excluding Nigeria, South Africa, and Angola is expected to remain robust. The report also indicated that the average growth among non-resource-intensive countries is projected to slow down, due to the ‘lingering effects of tropical cyclones in Mozambique and Zimbabwe, political uncertainty in Sudan, weaker agricultural exports in Kenya, and fiscal consolidation in Senegal”.
