The World Bank on Wednesday cut its economic growth forecasts for sub-Saharan Africa for 2019 to 2021 by 0.2 percentage points from its earlier projection, citing a slowdown in fixed investment and policy uncertainty in the global economy. The bank said the region’s economy was expected to grow 2.6 per cent this year from a 2.8 per cent projection in April. It said growth would rise to 3.1 per cent in 2020 and 3.2 per cent in 2021.
“Despite some improvements, the external environment is expected to remain difficult and uncertain for the region,” the bank said in its October Africa’s Pulse report. China and the United States, the world’s leading economies, this year imposed new tariffs on each other’s goods as part of a long-running dispute over Beijing’s trading practices which Washington says are unfair. Those tensions, plus softening global growth and falling commodity prices, compounded by the slow pace of reforms in African countries, “are weighing on activity across the region”, the bank said.
On the continent, drought, security threats, increases in the cost of public borrowing and private investment are also slowing growth.
Nigeria, South Africa and Angola, which make up about 60 per cent of sub-Saharan Africa’s annual economic output, are all facing various impediments, the bank said. Nigeria’s economy is expected to grow 2.0 per cent this year, compared with the previous forecast of 2.1 per cent in April and to expand to 2.1 per cent in 2020 and 2021 which are 0.1 and 0.3 percentage points lower than the April forecasts, respectively.
“The medium-term growth outlook continues to be constrained by a weak macroeconomic policy environment and slow policy implementation,” the bank said, citing multiple exchange rates, foreign exchange restrictions, high inflation, and low non-oil revenues among other obstacles.