Africa gains slight growth

Dar es Salaam. The average growth rate of Sub-Saharan African economies is estimated at 2.7 per cent in 2018, well above the previous year’s 2.3 per cent, a new World Bank (WB) report shows.

However, WB chief Economist for Africa Albert Zeufack said the growth was slower than expected, falling 0.4 per cent points lower than the April forecast.

He laid blame on a challenging business environment and the sluggish expansion in the region’s three largest economies of Nigeria, Angola and South Africa. He expounded that global trade and industrial activity lost momentum as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects.

He said the trend was partially a reflection of a less favorable external environment for the region.

“The region’s economic recovery is in progress but at a slower pace than expected,” said Mr Zeufack, adding: “To accelerate and sustain an inclusive growth momentum it is high time business environments were improved.”

He said policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity.

Lead economist and author of the report Cesar Calderon was of the view that policy makers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt.

“Public debt remained high and continues to rise in some countries. 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,” he said.

He cited as domestic risks as fiscal slippage, conflicts and weather shock.