The International Monetary Fund (IMF) projects that the Sub Saharan Africa economy will pick up a growth rate of 3.2 percent in 2019 and 3.6 percent by 2020.
The report also forecasts that diversified economies will grow faster than resource-rich countries.
Growth is forecast to be slower than previously envisaged for about two-thirds of the countries in the region, the report reveals, indicating that growth prospects vary considerably across countries in the region in 2019 and beyond.
Growth is projected to remain strong in non-resource intensive countries, averaging about six percent. As a result 24 countries, home to about 500 million people, will see their per capita income rise faster than the rest of the world. In contrast, growth is expected to move in slow gear in resource-intensive countries (2.5 percent). Hence, 21 countries are projected to have per capita growth lower than the world average.
Inflation is expected to ease going forward. While the average Sub-Saharan African-wide debt burden is stabilizing, elevated public debt vulnerabilities and low external buffers will continue to limit policy space in several countries.
The region continued to suffer from weather-related shocks. Severe droughts caused by El Nino have affected Angola, Botswana, Ethiopia, Kenya, Lesotho, Namibia, Zambia, and Zimbabwe causing food insecurity, migration, inflation pressure, fiscal pressure, electricity shortages, and lower trade balances, the report revealed.
The Ebola outbreak in the Democratic Republic of Congo worsened. Security tensions in the Sahel continued to intensify. Reported terrorism incidents in Sahel countries rose by 75 percent in 2019. Security challenges have had a substantial fiscal impact in some of these countries, translating into lower revenue and higher military and security spending.
According to the report, more job creation is needed to absorb new entrants to labor markets.
The report advised Sub Saharan countries to build resilience to shocks – advance domestic revenue mobilization, streamline subsidies, and improve Public Financial Management (PFM); reform public finances to clear domestic arrears and prevent their accumulation; advance economic diversification.
The report also recommended Sub Saharan countries to promote private sector investment; to comprehensively tackle tariffs and nontariff barriers in the context of the African Continental Free Trade Agreement (AfCFTA); to enhance competition and develop value chains.
The Ethiopian Herald November1, 2019
BY ABDUREZAK MOHAMMED
