IMF projects economic growth in sub-Saharan Africa at 3.4% in 2018 on improved global growth

The International Monetary Fund (IMF) has projected that economic growth in sub-Saharan Africa at 3.4 percent in 2018 from 2.8 percent in 2017, as the recovery gradually strengthens in the continent’s largest economies.

Papa N’diaye, chief of IMF’s regional studies division, stated: “Growth is expected to rise to 3.4 percent in 2018, from 2.8 percent in 2017 in sub-Saharan Africa.”

At a presentation on the 2018 Regional Economic Outlook in Addis Ababa, Ethiopia, the IMF stated that the region is experiencing a modest growth uptick, and about two-thirds of countries in the region reportedly saw accelerated growth over the past year.

N’diaye said the overall growth in the region could be linked to improved global growth, higher commodity prices, and continued strong public spending.

He noted that, beyond 2018, growth was expected to plateau below four percent, modestly above population growth, reflecting continued sluggishness in the oil-exporting countries and sustained growth in non-resource-intensive countries.

The 2018 outlook report notes that the region is home to a very diverse set of countries, resulting in uneven growth performance, adding that there was, therefore, a “need for policies to respond to the deep macroeconomic imbalances in the region.”

The need to foster private investment and increase domestic revenue mobilization were amongst the recommendations highlighted. N’diaye said these would improve and sustain growth in the region, and further added that “weak private investment has weighed on growth.”

He emphasized that, attaining the SDGs world require reducing macroeconomic vulnerabilities and raising medium-term growth.

The IMF’s projection is coming after World Bank projected the growth in the region to rise to 3.1 percent in 2018 and to 3.5 percent in 2019, from 2.6 percent in 2017.

World Bank’s projections were contained in its ‘Global Economic Prospects’ report released on Tuesday, June 6, 2018, for sub-Saharan Africa.

The bank said a modest economic recovery has continued in sub-Saharan Africa, supported by rising oil and metals production, spurred by higher commodity prices, by improving agricultural conditions and by increasing domestic demand.

The report further stated that several countries, including Ghana, Kenya, and Nigeria, experienced a pickup in manufacturing activity, while renewed government commitments to macroeconomic and governance reforms have boosted investor and consumer confidence in Angola, South Africa, and Zimbabwe.