Sub-Sa­ha­ran Africa faces slow­est growth since 2009 …Nige­ria, An­gola hard­est hit

Daily Trust - - BUSINESS - From Hamisu Muham­mad, Peru

The In­ter­na­tional Mon­e­tary Fund (IMF) has marked down its growth fore­casts for sub-Sa­ha­ran Africa for 2015 to 3¾ per cent - the low­est in six years.

Speak­ing to re­porters dur­ing the IMFWorld Bank An­nual meet­ings in Lima Peru, An­toinette Sayeh, Head of the IMF African depart­ment, said the vastly im­proved busi­ness and macroe­co­nomic en­vi­ron­ment that has al­lowed for strong growth in re­cent years now risks be­ing eclipsed by fall­ing com­mod­ity prices and less ac­com­mo­dat­ing fi­nan­cial con­di­tions.

But the Fund noted that de­spite the slow­down, the growth in the re­gion is still stronger than that in many re­gions, be­cause eco­nomic ac­tiv­i­ties in sev­eral coun­tries have weak­ened markedly in re­cent months.

There is con­sid­er­able vari­a­tion across the re­gion, how­ever, said Sayeh. Hard­est hit are the eight oil-ex­port­ing coun­tries, in­clud­ing Nige­ria and An­gola, which to­gether ac­count for half of the re­gion’s gross do­mes­tic prod­uct. “Fall­ing ex­port in­comes and sharp fis­cal ad­just­ments are tak­ing their toll on growth, which is ex­pected to de­cel­er­ate sharply to 3½ per cent this year, from 6 per cent in 2014,” re­marked Sayeh, adding these num­bers are weigh­ing down on the re­gional av­er­age.

She noted that while low-in­come coun­tries con­tinue to ex­pe­ri­ence growth rates of around 6 per cent, thanks to sus­tained pri­vate con­sump­tion and in­vest­ment in in­fra­struc­ture, growth in sev­eral mid­dle-in­come coun­tries is be­ing ham­pered by elec­tric­ity short­ages, in­creas­ingly dif­fi­cult fi­nanc­ing con­di­tions and weaker com­mod­ity prices.

The prospects for many coun­tries are fur­ther com­pounded by mod­est sav­ings and grow­ing deficits, As Sayeh posited, “In many cases, sav­ings from the re­cent pe­riod of rapid growth have been lim­ited, and coun­tries are now en­ter­ing this pe­riod with larger fis­cal and ex­ter­nal deficits than at the on­set of the 2008 global fi­nan­cial cri­sis.”

The IMF chief also de­scribed the se­cu­rity sit­u­a­tion in a num­ber of coun­tries as a fur­ther risk: “The civil war in South Su­dan and the acts of vi­o­lence per­pe­trated by Boko Haram and other in­sur­gency groups in a re­gion span­ning Cameroon, Chad, Niger, Nige­ria and Mali, are caus­ing wide­spread suf­fer­ing. They are also weigh­ing on eco­nomic ac­tiv­ity, strain­ing fis­cal bud­gets and di­min­ish­ing the prospects for in­vest­ment.” She added that the re­cent po­lit­i­cal un­rest in Bu­rundi and Burk­ina Faso was also a cause for con­cern.

With crash in oil prices, fis­cal ad­just­ments are said to be un­avoid­able for oil ex­porters like Nige­ria. Un­for­tu­nately, op­por­tu­ni­ties to smoothen the ad­just­ment are re­garded as “be­com­ing in­creas­ingly lim­ited.” For most other coun­tries, it is ad­vised that fis­cal poli­cies be guided by medi­umterm spend­ing frame­works that bal­ance debt sus­tain­abil­ity con­sid­er­a­tions while ad­dress­ing de­vel­op­ment needs.

L-R: Pres­i­dent/CE, Dan­gote In­dus­tries Lim­ited, Aliko Dan­gote; Pres­i­dent, United Re­pub­lic of Tan­za­nia, Dr. Jakaya Mr­isho Kik­wete, cut­ting of rib­bon with Kaduna State Gover­nor (Rep­re­sen­ta­tive of Nige­ria Pres­i­dent), Mal­lam Nasir Ah­mad El-Ru­fai and Re­gional Com­mis­sioner for Mt­wara, Hal­ima Den­dego at the com­mis­sion­ing of a new 3.0 Mil­lion MTPA, Dan­gote Ce­ment Tan­za­nia Plant at Mgao Vil­lage, Mt­wara, Satur­day.

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