Africa’s economy is this year expected to grow by 2.6 but that will not be enough to keep up with the continent’s growing population, the International Monetary Fund said in a report released Tuesday.
The region’s growth slowed sharply in 2016, averaging 1.4 percent, the lowest in two decades as about two-thirds of the countries in the region which account for 83 percent of the region’s GDP, slowed down. Sub-Saharan population growth averaged 2.7 percent, according to a 2015 World Bank estimate.
In its latest Regional Economic Outlook report the IMF said growth in the region will barely deliver any per capita gains and urged African governments to implement strong and urgent policy reforms to boost growth.
Countries like Senegal and Kenya are expected to continue to experience growth rates higher than 6 percent while Zimbabwe is forecast to grow at 2 percent. In a previous outlook published last October the IMF had forecast a contraction of 2,5 percent in Zimbabwe’s economy.
The IMF warned that “economic and social vulnerabilities are expected to increase further in Zimbabwe, despite some rebound in agricultural production.” “Recent improvements in commodity prices, while providing welcome breathing space, will not be sufficient to address the existing imbalances in resource-intensive countries…….Some other commodity exporters, such as Ghana, Zambia, and Zimbabwe, are also grappling with larger fiscal deficits in a context of already high debt levels and concerns about growth,” reads the report.
“The delay in implementing critical adjustment policies is leading to higher public debt, creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future.”
The report also noted the growing importance of the informal sector as a safety net providing employment and income. “The informal economy is an important component of most economies in the region, contributing between 25 and 65 percent of GDP and between 30 and 90 percent of total nonagricultural employment”.
“International experience suggests that the informal economy in sub-Saharan Africa is likely to remain large for many years to come, presenting both opportunities and challenges for policymakers”.