Johannesburg – Economic growth in sub-Saharan Africa will likely slow this year to its weakest in nearly two decades, the International Monetary Fund (IMF) said on Tuesday.
IMF said the decline was due to slump in commodity prices, the Ebola virus outbreak and drought.
In its African Economic Outlook, the Fund said the region would likely grow three per cent this year – the lowest rate since 1999 – after expanding by 3.4 per cent in 2015.
Growth was seen recovering to four per cent next year, helped by a slight recovery in commodity prices.
The Fund said it was still optimistic about the region’s prospects in the longer term.
“However, to realise this potential, a substantial policy reset is critical in many cases,” the Fund said.
Affected countries needed to contain fiscal deficits as the reduction in revenue from the commodities sector was expected to persist, it added.
Major oil exporters Angola and Nigeria were hardest hit by the slump in commodity prices as were Ghana, South Africa and Zambia, the report said.
It said Guinea, Liberia, and Sierra Leone were only gradually recovering from the Ebola epidemic.
There was also the problem of severe drought in the southern and eastern African countries, including Ethiopia, Malawi and Zimbabwe, the IMF added.
On the upside, Côte d’Ivoire, Kenya and Senegal would see growth of more than five per cent, mostly “supported by ongoing infrastructure investment efforts and strong private consumption,” the report said.
“The decline in oil prices has also helped these countries, though the windfall has tended to be smaller than expected.
“This is because exposure to the decline in other commodities’ prices and currency depreciation have partly offset the gains in many of them,” it added. (Reuters/NAN)
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