NAIROBI, Kenya, Oct 3 – Economic growth in sub-Saharan Africa is slower than expected with the average rate estimated at 2.7 per cent in 2018 up from last year’s 2.3 per cent.
This is according to a World Bank finding documented on Africa’s Pulse which says economies are still recovering from the slowdown in 2015 – 2016.
The slower pace of the recovery is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa.
Lower oil production in Angola and Nigeria offset higher oil prices and in South Africa, weak household consumption growth was compounded by a contraction in agriculture.
However, economic activity remained solid in the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya and Rwanda, supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.
World Bank Chief Economist for Africa Albert Zeufack recommends policy makers to continue to focus on investments that foster human capital, reduce resource mis-allocation and boost productivity.
Additionally, Zeufack urged policymakers to equip themselves to manage new risks arising from changes in the composition of capital flows and debt.
On Monday, the Kenya National of Bureau Statistics reported that the country’s Gross Domestic Product (GDP) grew by 6.3 per cent in the second quarter of 2018 compared to 4.7 per cent during a similar quarter in 2017.
KNBS attributed the growth to favourable weather conditions as the country experienced heavy rains that impacted positively on most of the agricultural and generation of hydroelectricity activities.
The World Bank also says that public debt in the region remains high and continues to rise in some countries.
Additionally, vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk.