NewsSouthern AfricaWorld Bank cuts Sub-Saharan Africa growth forecast


Posted on Thursday, 11 October 2018 14:20

World Bank cuts Sub-Saharan Africa growth forecast

By Reuters

Pedestrians shop at a busy Balogun Market in Lagos, Nigeria, Tuesday, Sept. 5, 2017. Photo:Sunday Alamba/AP/SIPA. Economic growth needs to be boosted in Nigeria, South Africa and Angola. The World Bank has dropped its 2018 economic growth forecast for Sub-Saharan Africa, partly blaming sluggish growth in some of the region's bigger economies.

Economic growth in Sub Saharan Africa is set to be slower than expected. The World Bank forecast for this year has dropped from 3.1% to 2.7. Part of the blame lies with tensions between the US and China.

Albert Zeufack, Chief economist for Africa, World Bank, says: "There are increasing risks in the international environment, for example, a trade war between our major trading partners. That may imply a lower demand for our products, especially in China. There are increasing tensions in the international sphere, increasing protectionism and isolationism that threaten global trade and may have an impact on Africa."

Although many African countries have grown steadily, major economies have been struggling. South Africa is in its worst recession since 2009, with unemployment at 27%.

Need to boost growth in three largest economies

Agriculture and household consumption levels have been disappointing. And while oil prices have risen globally, Nigeria and Angola have been producing less.

Zeufack said:  "We need to sustain reforms. We need to boost growth in our three largest economies -- Nigeria, South Africa and Angola, where the recovery has been extremely sluggish, therefore pulling down the average growth for Africa, when most of the countries are still growing at a hefty rate."

Global growth is set to be lower than expected too - but the impact has been less than in Africa alone.

The continent should perform marginally better than last year and far better than 2016.

But the World Bank is warning that high debt, weak currencies and rising interest rates mean some African countries may struggle to service their debts.

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