Barely two day after the International Monetary Fund (IMF) saw light at the end of Nigeria’s recession exit tunnel, the World Bank, on Wednesday released new report, saying sub-Saharan Africa is projected to recover to 2.6 per cent in 2017 after suffering sharp down turn in 2016.
The bank saw upturn in economic activity which is expected to continue in 2018-19, and reflects improvements in commodity prices, a pickup in global growth, and more supportive domestic conditions.
Chief Economist for the African Region, Albert G Zeufack, observed in the report that it is not good enough because Africa is growing slowly in per capita terms and the recovery remains weak, with growth expected to rise only slightly above population growth.
However, the new report averred that although the continent’s largest economies including Nigeria, South Africa, and Angola, are seeing a rebound from the 2016 slowdown, recovery has been slow due to insufficient adjustment to low commodity prices and policy uncertainty.
Whereas World Bank observed that several oil exporters in the Central African Economic and Monetary Community (CEMAC) are facing economic difficulties, it noted that seven countries – Cote d’Ivoire, Ethiopia, Kenya, Mali, Rwanda, Senegal and Tanzania have continued to exhibit economic resilience.
The report said the resilience is however, supported by domestic demand, posting annual rates above 5.4 per cent in 2015-2017.
It also revealed that Africa’s aggregate growth is expected to rise to 3.2 per cent in 2018 and 3.5 per cent in 2019, reflecting a recovery in the largest economies.
It was however quick to point out that risks on the domestic front to the current recovery stem from an inadequate pace of reforms, rising security threats and political volatility ahead of elections in some countries.
According to Zeufack, for Africa to achieve the modest rebound, “the continent needs to create an enabling environment to attract investors, since governments alone do not have the resources to close the gap in infrastructure reforms”.
“Africa must create great Public Private Partnerships (PPP), to attract investors since the gap in infrastructural development is so huge that governments’ intervention alone cannot help,” he said adding “all we need to do is create an enabling environment for them.”
Lead Economist and author of the report , Punam Chuhan-Pole argued that “With poverty rates still high, regaining the growth momentum is imperative and growth needs to be more inclusive and will involve tackling the slowdown in investment and the high trade logistics that stand in the way of competitiveness”.