Economic Growth
Ghana is highly tipped to economically outperform her other counterparts in sub-Saharan Africa this year and grow at 8.3 percent, buoyed by her oil & gas expansion.
The Brookings’ Africa Growth Initiative, which made this known in its latest report, said Ethiopia would follow at 8.2 percent, with Côte d’Ivoire coming next at 7.2 percent, Djibouti at 7 percent, Senegal at 6.9 percent and Tanzania at 6.8 percent.
Premising its findings on recent data submitted by the World Bank, it said Africa has six of the world’s 10 fastest growing economies this year.
However, both the World Bank and Brookings warned that many of the region’s economies, irrespective of size or growth rate, needed to pay more attention to debt management in 2018.
Brookings cited IMF chief Christine Lagarde in an interview last month by which she revealed that public debt was approaching critical levels in some countries in the region, adding that debt was at 56 percent of GDP on average in 2017 versus 40 percent in 2013.
“It exceeded 25 percent in oil-dependent countries last year.”
The World Bank forecasts growth of 3.2 percent for the year, up from 2.4 percent in 2017.
It also predicts slightly higher growth for 2019 of 3.5 percent.
It continued that much of that growth would still rely on improving commodity prices and executing economic reforms even though it was all rather delicately balanced.
World Bank thinks a drop in commodity prices, higher-than-expected global interest rate rises and the ongoing debt mismanagement by some countries could set the region back.
Brookings pointed out in its Foresight Africa 2018 report that half of sub Saharan Africa’s economies will grow at a rate similar to or higher than during the heyday of the “Africa rising” narrative, which was in the run-up to the commodity price crash of 2014.
The region’s growth is higher, at 5%, if you exclude the big three economies of Nigeria, Angola and South Africa.
The first two, as the continent’s largest oil producers, should see accelerated expansion as oil prices recover this year.
Brent crude hit a high of $70 this past week.
The World Bank says South Africa will expand by 1.1 percent compared with 0.8 percent last year while Nigeria should grow by 2.5 percent from 1 percent in 2017. Angola will expand by 1.6 percent.
But according to Brahima Coulibaly, director of Brookings’ Africa Growth Initiative, the big economies need to get their act together.
“These large economies are at risk of a lost decade unless policymakers implement significant reforms to shift the growth model away from excessive reliance on oil in Angola and Nigeria and in the case of South Africa, to overcome structural problems—many inherited from the apartheid era.”