Growth in the Sub-Saharan Africa region, is picking up despite the estimated marginal increase of 2.7 % as compared to 2.3 % in 2017. According to the World Bank Africa Pulse report, the improved but slow growth is partially a reflections of a less favourable external environment for the region a financial market pressures intensify in some emerging markets with dollar-denominated debts.
Speaking via teleconference from Washington, the Chief Economist for the African at the World Bank, Albert Zeufack said the slower pace of recovery in the Sub-Saharan Africa region is explained by sluggish expansion in three of the region’s largest economies; Nigeria, Angola and South Africa.
He emphasized that to accelerate and sustain an inclusive growth momentum, policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity.
Mr. Zeufack noted that, “the extended environment for sub Saharan countries has become more challenging, in fact economic growth is deteriorating in our main trading partners. The US dollar is strengthening and there are heighten policy uncertainties, especially on trade policy, as trade wars are waged among the largest trading nations and we are also seeing the lightening in global financing conditions, so external environments is going to more challenging than we had expected.”
The lead Economist and lead author of the report, Cesar Calderon said the three largest economies have reshaped the composition of capital flows and debts as it may put the region’s public debt sustainability further at risk.
He added that,” it is not only the fact that Africa has low level of human capital that contributes to lower productivity, but it’s the low level of human capital compounded by misallocation of resources and one of which is misallocation of time.”
He indicated that, policies and reforms are needed to strengthen resilience to risks and raise medium-term potential growth.
Story by Maryam Hassan