The World Bank said sub-Saharan Africa’s economy growth was projected to reach 3.1 percent in 2018, and an average of 3.6 percent between 2019 and 2020.
But, the Bank said the projected growth was not considered fast enough to meet expectations. The projection was part of findings in “Africa’s Pulse”, a bi-annual analysis of the state of African economies conducted by the World Bank, released on Wednesday in Washington.
The report said growth forecasts were based on expectations that commodities and metals prices would remain stable, while governments in the region would implement reforms necessary to address macroeconomic imbalances and boost investment.
“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” World Bank Chief Economist for the Africa Region, Albert Zeufack, said at the presentation of the publication.
“African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth,” he added. He said the moderate pace of economic expansion was reflected in the gradual pick-up in growth in the region’s three largest economies, namely Nigeria, Angola and South Africa. Besides, he said economic activity would pick up in some metals exporters, as mining production and investment rise.
Among non-resource intensive countries, solid growth, supported by infrastructure investment, he said, would continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal.
Mr Zeufack said growth prospects have continued to gather strength in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth.
In Ethiopia, he said growth would remain high, as government-led infrastructure investment continues. World Bank Lead Economist and author of the report, Punam Chuhan-Pole, said the economic recovery of many African countries would be impacted due to fluctuations in commodity prices and production, challenges.
“This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda,” she said
On the region’s public debt relative to GDP, Mrs Chuhan-Pole said the composition of debt was not only rising, but has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones. She said higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability with 18 countries classified at high-risk of debt distress as at March 2018, compared with eight in 2013.
“By fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth,” Mr Zeufack said.
The latest issue of Africa’s Pulse focused on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction. Part of the findings were that achieving universal electrification in Sub-Saharan Africa wouldl require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems.
Other findings included the need for improved regulation of the electricity sector and better management of utilities as key requirements for success.