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Amechi Ogbonna, Washington DC, USA
Although growth and economic recovery trajectory in most sub-Saharan African countries are likely to continue in 2019, the International Monetary Fund (IMF), yesterday, hinted that Nigeria, South Africa and Angola may record slower improvement in the standard of living of their citizens due to their governments’ failure to diversify their revenue bases.
In its latest Regional Economic Outlook for sub-Saharan Africa, released at the ongoing Spring Meetings of the IMF and the World Bank in Washington DC, USA, the IMF categorically identified Nigeria , South Africa and Angola among the countries whose citizens may not enjoy improved standard of living anytime soon. This was even as countries like Benin Republic, Ethiopia, and Senegal were listed among fast- economies that needed to deepen their privatisation programmes to sustain the tempo of economic growth estimated at between 3 to 3.5 per cent this year.
“Sub Saharan Africa’s economic recovery looks set to continue, with growth expected to increase from 3.0 per cent in 2018 to 3.5 per cent in 2019. Yet, region-wide growth masks wide differences in prospects across countries. Some 21 countries, mainly the region’s more diversified economies, are expected to grow at more than 5 per cent and see income per capita rise faster than the rest of the world on average over the medium term. However, the remaining countries, comprising mostly resource intensive countries, including the largest (Nigeria and South Africa), are expected to see slower improvements in standards of living.” The Fund said in the report.
According to Abebe Aemro Selassie, Director of the IMF’s African Department, “ External and domestic headwinds are weighing on growth prospects. The global expansion is losing steam, including in key trading partners such as China and the Euro area; as we see trade tensions persisting; and volatile global financial conditions and commodity prices. Public debt vulnerabilities remain elevated in some countries and non-performing loans remain high, partly due to large public sector domestic arrears.”
Selassie pointed to two broad implications for policies for African countries in the period under consideration. For fast-growing economies, like Benin, Ethiopia, and Senegal, he called for more private sector -led recovery as he admitted that greater public investment had helped spur high growth, while also steadily increasing public debt levels.
He, however, regretted that in the more resource-intensive and slower growing economies—such as Angola, Nigeria, and South Africa—there is an urgent need to press ahead with much-needed policies to adjust to lower commodity prices and facilitate economic diversification. The IMF Director noted that urgent actions on the part of the government would also help address policy uncertainties that are holding back growth.
