Nigeria out of recession, regional growth to average 2.4% —World Bank

The World Bank Group has said that Nigeria pulled out of a five-quarter recession and South Africa emerged from two consecutive quarters of negative growth. This is contained in Africa Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank. As a result the Economic growth in Sub-Saharan Africa is recovering at a modest pace, and is projected to pick up to 2.4 per cent in 2017 from 1.3 per cent in 2016, according to the new

This is however below the April forecast of 2.6 per cent. The World Bank reported that improving global conditions, including rising energy and metals prices and increased capital inflows, have helped support the recovery in the regional growth. However, the report warns that the pace of the recovery remains sluggish and will be insufficient to lift per capita income in 2017.

Looking ahead the report said Sub-Saharan Africa is projected to see a moderate increase in economic activity, with growth rising to 3.2 per cent in 2018 and 3.5 per cent in 2019 as commodity prices firm and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing. However, growth prospects will remain weak in the Central African Economic and Monetary Community (CEMAC) countries as they struggle to adjust to low oil prices.
According to the report “Growth continues to be multispeed across the region. In non-resource intensive countries such as Ethiopia and Senegal, growth remains broadly stable supported by infrastructure investments and increased crop production. In metal exporting countries, an increase in output and investment in the mining sector amid rising metals prices has enabled a rebound in activity. Headline inflation slowed across the region in 2017 amid stable exchange rates and slowing food price inflation due to higher food production. Fiscal deficits have narrowed, but continue to be high, as fiscal adjustment measures remain partial. As a result, government debt remains elevated. Across the region, additional efforts are needed to address revenue shortfalls and contain spending to improve fiscal balances”.

The economic expansion in West African Economic and Monetary Union (WAEMU) countries is expected to proceed at a strong pace on the back of solid public investment growth, led by Côte d’Ivoire and Senegal. Elsewhere, growth is projected to firm in Tanzania on a rebound in investment growth and recover in Kenya, as inflation eases. Ethiopia is likely to remain the fastest-growing economy in the region, although public investment is expected to slow down.

“The outlook for the region remains challenging as economic growth remains well below the pre-crisis average,” says Punam Chuhan-Pole, World Bank Lead Economist and lead author of the report. “Moreover, the moderate pace of growth will only yield slow gains in per capita income that will not be enough to harness broad-based prosperity and accelerate poverty reduction.” Analysis shows that rising capital accumulation has been accompanied by falling efficiency of investment spending in countries where economic growth has been less