IMF Sees Sub-Saharan Africa’s Economic Growth Drop To 3% in 2016

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The International Monetary Fund (IMF) says sub-Saharan Africa economy faces a possible downturn, with growth expected to drop from 3.4 per cent in 2015 to about 3 per cent in 2016.

The Fund said at the presentation of its latest African Economic Outlook in Johannesburg, South Africa that the growth would likely slow this year to its weakest level in nearly two decades.

It identified three factors that would cause the drop, namely the slump in global commodity prices, the Ebola virus outbreak and drought.

The IMF said Africa’s major oil exporters, including Angola and Nigeria, were hardest hit by the slump in commodities prices, same as Ghana, South Africa and Zambia.

The decline in oil prices, the Fund said, paved the way for new realities for the continent, like the diversification trend being propagated in Nigeria.

Also, Guinea, Liberia, and Sierra Leone are gradually recovering from the Ebola epidemic, while several southern and eastern African countries, including Ethiopia, Malawi and Zimbabwe are being devastated by severe drought.

On the upside, the Fund said Côte d’Ivoire, Kenya and Senegal would see growth of more than 5 per cent, mostly “supported by on-going infrastructure investment efforts and strong private consumption”.

The Fund said the affected countries needed to contain fiscal deficits as the reduction in revenue from the commodities sector was expected to persist.

While addressing the escalation of the Ebola scourge in West Africa in April 2016, a group of scientists wrote in Science Advances that survivors of the disease could still have the virus living in them even after regaining their health.

This virus, according to them, could be transmitted sexually, which accounts for the reason why the virus keeps popping up in Sierra Leone and Liberia since 2014.

The World Bank in a January 2016 projection reported that global commodity prices and electricity constraints, which were expected to stabilize, have remained low through 2017.

The report said activity is expected to pick up to 4.2 per cent in 2016 and to 4.7 per cent in 2017.

“Growth was seen recovering to 4 per cent next year, helped by a slight recovery in commodity prices,” the Fund said.

The Director of the African Department at the IMF, Antoinette Sayeh, recently said sub Saharan economies need to reset their policies as a way of addressing prevailing economic challenges.

 

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