The ris­ing debt in sub-Sa­ha­ran Africa is a con­cern for the IMF

The Mercury - - OPINION & ANALYSIS -

ECO­NOMIC growth is ex­pected to rise to 3.4 per­cent in sub-Sa­ha­ran Africa next year from 2.6 per­cent this year, the IMF said yes­ter­day, but warned that ris­ing debt and po­lit­i­cal risks in larger economies would weigh down fu­ture growth.

Nige­ria and South Africa are the big­gest economies in Africa south of the Sa­hara, but both na­tions have been clouded by po­lit­i­cal un­cer­tainty linked to the ten­ure of their lead­ers.

The IMF said a good har­vest and re­cov­ery in oil out­put in Nige­ria would con­trib­ute more than half of the growth in the re­gion this year while an up-tick in min­ing and a bet­ter har­vest in South Africa as well as a re­bound in oil pro­duc­tion in An­gola will add to growth.

But po­lit­i­cal un­cer­tainty loomed large in Nige­ria, where Pres­i­dent Muham­madu Buhari is af­flicted by ill­ness, caus­ing spec­u­la­tion about whether he is well enough to run Africa’s big­gest econ­omy.

South Africa has been clouded by the rule of Ja­cob Zuma, who has bat­tled scan­dals, in­clud­ing cor­rup­tion al­le­ga­tions, ahead of his ANC party’s con­fer­ence in De­cem­ber to elect a new party leader.

“Key down­side risks to the re­gion’s growth out­look em­anate from the larger economies, where el­e­vated po­lit­i­cal un­cer­tainty could de­lay needed pol­icy ad­just­ments and dampen in­vestor and con­sumer con­fi­dence,” the IMF said in a re­port launched in Harare.

“A fur­ther pick-up in growth to 3.4 per­cent is ex­pected in 2018, but mo­men­tum is weak.” To help main­tain growth, coun­tries should di­ver­sify from de­pen­dence on com­modi­ties and oil, im­ple­ment fis­cal re­forms to stim­u­late growth and at­tract pri­vate in­vest­ment. – Reuters

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