IMF PROJECTS MODEST ECONOMIC RECOVERY FOR SUB-SAHARAN AFRICA

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Oil...recovery in production pivotal to economy

 

ECONOMIC growth in sub-Saharan Africa remains fragile, with modest recovery of about 2.6 percent projected for the region in 2017 by the International Monetary Fund (IMF).

The report says 2016 was a difficult year for many sub-Saharan countries, with regional growth dipping to 1.4 percent—the lowest level of growth in more than two decades.

The modest rebound now being projected by the IMF will be to a large extent driven by one-off factors in the three largest countries—a recovery in oil production in Nigeria, higher public spending ahead of the elections in Angola, and the fading of drought effects in South Africa.

Furthermore, the report says: “While sub-Saharan Africa remains a region with tremendous growth potential, the deterioration in the overall outlook partly reflects insufficient policy adjustment. In that context, and to reap this potential, strong and sound domestic policy measures are needed to restart the growth engine.”

The informal economy is cited as a key component of most economies in sub-Saharan Africa, contributing between 25 and 65 percent of GDP and accounting for around 30 and 90 percent of total nonagricultural employment.

The report says most economies in sub-Saharan Africa are likely to have large informal sectors for many years to come, presenting both opportunities and challenges for policymakers.

Against this backdrop, two related questions arise: How can growth be revived in the hardest-hit countries? And for countries that are still growing fast, how can growth be sustained?”

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