IMF says rising debt, political risk dim sub-Saharan Africa’s economic outlook

HARARE: Economic growth is expected to rise to 3.4 per cent in sub-Saharan Africa next year from 2.6 per cent in 2017, the IMF said in a report yesterday, but warned that rising debt and political risks in larger economies would weigh down future growth.

Nigeria and South African 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 uptick 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 corrupt 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 pickup in growth to 3.4 per cent is expected in 2018, but momentum is weak, and growth will likely remain well below past trends in 2019.”

To help maintain growth, countries should diversify from dependence on commodities and oil, implement fiscal reforms to stimulate growth and attract private investment. — Reuters