Sub-Saharan Africa will rely on continued recovery and reaffirming of commodity prices and economic reforms implementation to grow by about 3.2 per cent in 2018, according to World Bank projections.
The Bank’s January 2018 Global Economic Prospects report projects a 3.2 per cent growth, up from 2.4 per cent for the Sub-Saharan region in 2017.
The group also projects that the global economy will grow by about 3.1 per cent in 2018, driven by the recovery in investments, manufacturing, and continued tra]de as well as commodity-exporting economies benefitting from steady commodity prices.
The bank notes that regional growth could be threatened by a drop in commodity prices, and high global interest rates, and inadequate efforts to ameliorate debt dynamics could set back economic growth.
“A drop in commodity prices, steeper-than-anticipated global interest rate increases, and inadequate efforts to ameliorate debt dynamics could set back economic growth,” the just released report reads in part.
The report projects that some of the regional economic powerhouses will have below average growth with South Africa expected to grow by about 1.1 per cent and Nigeria by about 2.5 per cent.
World Bank Group President Jim Yong Kim said that the recovery trends present an opportunity for investment in human and physical capital for countries keen on increasing productivity and increasing workforce participation.
“The broad-based recovery in global growth is encouraging, but this is no time for complacency. This is a great opportunity to invest in human and physical capital. If policy makers around the world focus on these key investments, they can increase their countries’ productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and boosting shared prosperity,” he explained.
The International Monetary Fund (IMF) has an ambitious forecast of economic growth this year, at 6.8 per cent, according to projections made in 2017.
In 2017, the Rwandan economy had been projected to grow at about 6.2 per cent but this was later revised to 5.2 per cent owing to consequences of drought and slowed economic performance.
The construction sector also somewhat slowed down in 2017 compared to the previous year after due to major infrastructure projects.
The economy grew 1.7 per cent in the first quartier of 2017, 4 per cent in the second quarter, and 8 per cent in the third.
For the economy to grow by the projected 5.2 per cent, it ought to have grown by over 7 per cent in the fourth quarter (which is likely given the general performance of services and agriculture sectors).
The government is confident that necessary investments and efforts have been undertaken to ensure that growth is sustained in coming years.
This includes efforts to increase tourism earnings, mineral receipts, investment in human capital, science and technology, financial services, among others.