Growth in sub-Saharan Africa is projected to remain at 3.2 percent in 2019 and rise to 3.6 percent in 2020, this is according to the latest IMF’s Regional Economic Outlook report for Sub Saharan Africa released in Nairobi on Monday.
The expected recovery, however, according to the report is at a slower pace than previously envisaged for about two-thirds of the countries in the region, partly due to a challenging external environment.
Growth is projected to remain strong in non-resource-intensive countries, averaging about 6 percent.
As a result, 24 countries, home to about 500 million people, will see their per capita income rise faster than the rest of the world, noted the report.
In contrast, growth is expected to move in slow gear in resource-intensive countries (2½ percent).
Hence, noted the report, 21 countries are projected to have per capita growth lower than the world average.
“Reducing risks and promoting sustained and inclusive growth across all countries in the region requires carefully calibrating the near-term policy mix, building resilience, and raising medium-term growth,” the Director for the African Department of the IMF, Mr Abebe Selassie told journalists in Nairobi.
According to the report, inflation is expected to ease going forward. While the average sub-Saharan African-wide debt burden is stabilizing, elevated public debt vulnerabilities and low external buffers will continue to limit policy space in several countries.
“The outlook faces further downside risks. External headwinds have intensified compared to April and include the threat of rising protectionism, a sharp increase in risk premiums or reversal in capital inflows owing to tightening global financial conditions, and a faster-than-anticipated slowdown in China and in the euro area,” added the report.
Regionally, near-term downside risks include climate shocks, intensification of security challenges, and the potential spread of the Ebola outbreak beyond the Democratic Republic of the Congo.
In addition, fiscal slippages, including those ahead of elections in some countries, and a lack of reform in key countries could add to deficit and debt pressures. Over the medium term, successful implementation of reforms, including in the context of the African Continental Free Trade Area (AfCFTA), could pose significant upside risks, noted the report.
JK/abj/APA