The World Bank Group forecasts that the Sub-Saharan Africa economy will grow by 2.9 per cent in 2020, recovering from 2.4 per cent growth recorded last year.
In its ‘Global Economic Prospects’ report released on Wednesday this week, the institution said regional growth is expected to pick up depending on investor confidence improvement in some large economies, and energy bottlenecks ease.
A pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters, the economic outlook indicates.
Among the region’s exporters of agricultural commodities, sustained strong public infrastructure spending, combined with increased private sector activity in Madagascar, Rwanda, and Uganda, is expected to continue to support output, the report’s authors observed.
According to the report, continued reforms to raise the productivity and competitiveness of export-oriented sectors, such as in Burkina Faso and Côte d’Ivoire, will also support output.
Rwanda with brightest prospects
Rwanda is the only Sub-Saharan African country projected to grow above 8 per cent.
Canisius Bihira, an economist based in Kigali, asserts the 8.1 forecasted growth is within an ideal range given the trend at which the domestic economy has been growing at.
The Rwandan economy grew by 8.4 per cent in the first quarter of 2019 and double-digit growth of 12.2 per cent was recorded in the second quarter (April to June).
In the third quarter, economic growth averaged 12 per cent.
Bihira thinks government extended support towards key sectors like agriculture will determine the extent to which that growth will be realised.
“The government needs to support agriculture particularly crop production and [agricultural] export services for this growth to be realised,” he noted.
Bihira added that support in the form of loans from financial institutions towards agriculture is also important to boost the economy.
In Cote d’Ivoire, the economy is expected to grow at 7 per cent, Ghana’s economy is forecast to grow at 6.8 per cent followed Benin at 6.7 per cent, Uganda at 6.5 per cent, and Ethiopia at 6.3 per cent.
In Kenya, the largest economy in the East African region, growth is expected to edge towards 6 per cent.
In South Africa, growth is expected to edge up to 0.9 per cent, assuming the new administration’s reform agenda gathers pace, policy uncertainty wanes, and investment gradually recovers.
Increasingly binding infrastructure constraints, especially in electricity supply, are expected to inhibit domestic growth, while export momentum will be hindered by weak external demand.
Growth in Nigeria is expected to edge up to 2.1 per cent.
Growth in Angola is anticipated to accelerate to 1.5 per cent only if ongoing reforms provide greater macroeconomic stability, improve the business environment, and bolster private investment.
In the West African Economic and Monetary Union, growth is expected to hold steady at 6.4 per cent.
The global economic growth projects a growth of 2.5 per cent in 2020 as investment and trade gradually recover from last year’s significant weakness, but downward risks persist, the World Bank said.
That is a slight increase from 2.4 per cent last year. That had been the weakest performance since the 2008 financial crisis and a significant slowdown from growth rates above 3 per cent in 2017 and 2018.
The bank’s revised outlook represents a downgrade from its last forecast in June when it had expected growth to be 0.2 percentage points higher this year.
The forecast also trimmed its expectation for global growth by 0.2 percentage points over the next two years to moderate rates of 2.6 per cent in 2021 and 2.7 per cent in 2022.Follow https://twitter.com/Julio_Bizimungu