Sub-Saharan Africa’s growth has fallen to its lowest level in more than 20 years, the IMF said in its latest Regional Economic Outlook for Sub-Saharan Africa.
While some countries like Senegal and Kenya continue to experience growth rates higher than 6 percent, growth has slowed for two thirds of countries in the region bringing down average growth to 1.4 percent in 2016.
A modest recovery in growth, to 2.6 percent, is expected in 2017, but the report said the underlying regional momentum remains weak, and at this rate, sub-Saharan African growth will continue to fall well short of past trends of 5-6 percent, and barely exceed population growth.
While noting that many countries suffered a very substantial commodity price shock, the report also points to insufficient policy adjustment to account for the broad-based slowdown in growth momentum in the region. This is especially the case among commodity exporters, notably oil exporters, such as Angola, Nigeria and the countries of the Central African Economic and Monetary Union (CEMAC). According to the report, the delay in implementing critical adjustment policies is leading to higher public debt, creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future.
Vulnerabilities are also emerging in countries that do not rely significantly on commodities for their exports. While these countries—such as Cote d’Ivoire, Kenya, and Senegal—have generally maintained high growth rates, their fiscal deficits have been high for years, as governments rightly sought to address social and infrastructure gaps. But now, consequently, public debt and borrowing costs are on the rise.