GROWTH in sub-Saharan Africa is projected to rise to 3.6 percent in 2020 from 3.2 percent in 2019, according to the 2019 Regional Economic Outlook of the International Monetary Fund (IMF) released on Thursday at the UN Economic Commission for Africa (ECA) in Ethiopia’s capital Addis Ababa.
The IMF report indicates that growth is forecast to be slower than previously envisaged for about two-thirds of the countries in the region.
In his presentation of the report, IMF Division Chief African Development, Papa N’diaye said that growth is projected to remain strong in non-resource-intensive countries, averaging about 6 percent, while it is expected to move in slow gear in resource-intensive countries.
And some 24 countries, home to about 500 million people, will see their per capita income rise faster than the rest of the world, the report says, while growth is expected to move in slow gear in resource-intensive countries (2.5 percent). Hence, 21 countries are projected to have per capita growth lower than the world average.
Inflation is expected to ease going forward. While the average sub-Saharan African-wide debt burden is stabilising, elevated public debt vulnerabilities and low external buffers will continue to limit policy space in several countries, according to the report.
The outlook faces further downside risks. External headwinds have intensified compared to April and include the threat of rising protectionism, a sharp increase in risk premiums or reversal in capital inflows owing to tightening global financial conditions, a faster-than-anticipated slowdown in China and in the euro area.
Regionally, near-term downside risks include climate shocks, intensification of security challenges, and the potential spread of the Ebola outbreak beyond DR Congo, the report says, adding fiscal slippages, including those ahead of elections in some countries, and a lack of reform in key countries could add to the deficit and debt pressures.
Over the medium term, successful implementation of reforms, including in the context of the African Continental Free Trade Area, could pose significant upside risks, according to the report.