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Africa’s economic growth to fall 1.6% in 2016 – World Bank

africa-pulseIn their October 2016 report: Africa’s pulse, An analysis of issues shaping Africa’s economic future, the World Bank Group notes that after slowing to 3 percent in 2015, economic growth in Sub-Saharan Africa is projected to fall to 1.6 percent in 2016. That is half of what it was last year and the lowest level in over two decades. This fall is attributed to low commodity prices, tight financial conditions, domestic headwinds from policy uncertainty, droughts, and political and security concerns. The report states that overall slowdown in Sub-Saharan Africa’s growth reflects economic deterioration in the region’s largest economies.

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However despite the gloomy forecast, a point to note is that Sub- Saharan Africa is growing at diverging speeds; Ethiopia, Rwanda, and Tanzania—are continuing to post annual average growth rates of over 6 percent which is way higher than the region’s average, It was noted that these countries have stronger quality of monetary and fiscal policies, better business regulatory environment, more diverse structure of exports, and more effective public institutions. That is to say, the established and improved performers have made more progress in business regulation, rule of law, and government effectiveness. Rwanda is one of the fastest structural reformers in the region.

The report further notes that Sub-Saharan African countries underfund high-return investments, and that increasing the efficiency of current public spending in agriculture while rebalancing its composition could reap massive benefits.

Improving the productivity of smallholder farms is central to lifting rural incomes and reducing poverty in Sub-Saharan Africa,” says Punam Chuhan-Pole, Lead Economist for World Bank Africa and the report’s author.“But unleashing this productivity requires investing in rural public goods such as rural infrastructure, agricultural research, and use of improved technologies, as well as in availability of good data and evidence.

Increasing agricultural productivity is central to transforming Sub-Saharan African economies and promoting sustained and inclusive growth. This has to date been done by expanding the area under cultivation rather than productivity gains.

See report below for more.

Africa’s Pulse by Kisa on Scribd

 

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