Oyetunji Abioye, Washington DC
The World Bank has cut its growth forecast for the sub-Saharan Africa region this year from 2.6 per cent to 2.4 per cent.
The World Bank had in April stated that the region would grow by 2.6 per cent.
According to the new Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, economic growth in sub-Saharan Africa is recovering at a modest pace and is projected to pick up to 2.4 per cent this year from 1.3 per cent in 2016.
The report stated that the rebound would be led by the region’s largest economies.
In the second quarter of this year, Nigeria pulled out of a five-quarter recession and South Africa emerged from two consecutive quarters of negative growth.
However, the report warned that the pace of the recovery remained sluggish and would be insufficient to lift per capita income in 2017.
The report read in part, “Headline inflation slowed across the region in 2017 amid stable exchange rates and slowing food price inflation due to higher food production. Fiscal deficits have narrowed, but continue to be high, as fiscal adjustment measures remain partial.
“As a result, government debt remains elevated. Across the region, additional efforts are needed to address revenue shortfalls and contain spending to improve fiscal balances.”
The World Bank Chief Economist for Africa, Albert Zeufack, said in a statement, “Most countries do not have significant wiggle room when it comes to having enough fiscal space to cope with economic volatility. It is imperative that countries adopt appropriate fiscal policies and structural measures now to strengthen economic resilience, boost productivity, increase investment and promote economic diversification.”
Looking ahead, sub-Saharan Africa is projected to see a moderate increase in economic activity, with growth rising to 3.2 per cent in 2018 and 3.5 per cent in 2019 as commodity prices firm and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing, the report stated.
“The outlook for the region remains challenging as economic growth remains well below the pre-crisis average,” World Bank’s Lead Economist and lead author of the report, Punam Chuhan-Pole, said.
“Moreover, the moderate pace of growth will only yield slow gains in per capita income that will not be enough to harness broad-based prosperity and accelerate poverty reduction,” he added.
As African countries seek new drivers of sustained inclusive growth, attention to skills building is growing, according to the report.
The Africa’s Pulse report dedicated a special section to analysing how African countries, through smarter investments in foundational skills for children, youth and adults, can leverage spending to achieve better learning outcomes that will simultaneously enhance productivity growth, inclusion, and the adaptability of Africa’s workers to the demands of today’s markets and those of the future.
It stated, “In most countries, skills-building efforts must strive to make spending smarter to ensure greater efficiency and better outcomes.
“Countries face two hard choices in balancing their skills portfolios: striking the right balance between overall productivity growth and inclusion, on the one hand, and investing in the skills of today’s workforce and tomorrow’s workforce, on the other hand.”
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