WASHINGTON-(MaraviPost)-The World Bank on Wednesday, forecasted an economic growth for Sub-Sahara Africa with the projection of 2.6% in 2017, after the region registered the worst decline in more than two decades in 2016.
This is the latest World Bank’s bi-annual analysis of the state of African economies titled, “Africa’s Pulse” that was released on April 19. The report reveals that the region is showing signs of recovery.
The Africa Pulse’ overview for the urgent implementation of reforms to improve institutions that foster private sector growth, develop local capital markets, improve infrastructure, and strengthen domestic resource mobilization.
According to the Bank, the economic rebound comes on the background of a slowdown in investment growth from nearly 8% to 0.6% between 2014 and 2015.
Africa’s Pulse report, made available to The Maravi Post, shows that the global economic outlook is improving, and should support the recovery in the region. The report also adds that the continent’s aggregate growth is expected to rise to 3.2% in 2018, and 3.5% in 2019, reflecting a recovery in the largest economies.
The analysis indicate that it will remain subdued for oil exporters, while metal exporters are projected to see a moderate uptick.
The GDP growth in countries whose economies depend less on extractive commodities, should remain robust, underpinned by infrastructure investments, resilient services sectors, and the recovery of agricultural production especially the case for Ethiopia, Senegal, and Tanzania.
The report further highlights that a stronger-than-expected tightening of global financing conditions, weaker improvements in commodity prices, and a rise in protectionist sentiment, represent downside external risks to the outlook.
The Africa’s Pulse report dedicates a special section to analyzing the region’s infrastructure performance across sectors, revealing dramatic improvements in quantity and quality of telecommunications contrasted by persistent lags in electricity generation, and access.
“In this environment, fostering public and private investment, notably in infrastructure, is a priority. The region experienced a slowdown in investment growth from nearly 8% in 2014 to 0.6% in 2015,” the report reads in part.
The study therefore highlights that the continent is in dire need of necessary reforms to boost investment and tackle poverty. African countries advised to undertake the much-needed development spending, but to avoid increasing its debt to unsustainable levels.
“With poverty rates still high, regaining the growth momentum is imperative. Growth needs to be more inclusive and will involve tackling the slowdown in investment and the high trade logistics that stand in the way of competitiveness,” World Bank Lead Economist and the report’s author, Punam Chuhan-Pole said.
In his observation, World Bank Chief Economist for the Africa Region, Albert G. Zeufack said while countries move towards fiscal adjustment, there was a need to protect the right conditions for investment so that Sub-Saharan African countries can achieve a more robust recovery.
“We need to implement reforms that increase the productivity of African workers and create a stable macroeconomic environment. Better and more productive jobs are instrumental to tackling poverty on the continent,” Zeufack said.
The World Bank’s African Pulse report coincides with Malawi’s National Statistics Office (NSO), findings that the inflation rates fell slightly last month to 15.8 percent from 16.1% in February in 2017.
The inflation decline has been attributed to decrease in the price of maize, currently selling as low as MK3, 500 per 50 kilogram (kg).
The NSO said the same period last year, inflation rate stood at 22.1%, meaning that prices are softer in 2017 than during the same period in 2016.
While the news of the economic rebound might be good for Malawi, the World Bank has however, warned that the recovery remains weak. This is because the growth is expected to rise only slightly above the population growth, a pace that hampers efforts to boost employment and reduce poverty.