Thursday, October 10, 2019 7:08 am
The World Bank says economic recovery in Nigeria, South Africa, and Angola (the region’s three largest economies) remained weak in 2019, a situation that is weighing on the region’s prospects.
This is according to the 20th edition of African Pulse, World Bank’s twice-yearly economic update for the region released in Washington D.C. on Wednesday.
According to the report, growth in Sub-Saharan Africa remained slow through 2019, hampered by persistent uncertainty in the global economy and the slow pace of domestic reforms.
It added that overall growth in Sub-Saharan Africa was projected to rise to 2.6 per cent in 2019 from 2.5 per cent in 2018, 0.2 percentage points lower than the April forecast.
It also said that in Nigeria, growth in the non-oil sector was sluggish, while in Angola the oil sector remained weak and that in South Africa, low investment sentiment was weighing on economic activity.
“Excluding Nigeria, South Africa and Angola, growth in the rest of the subcontinent is expected to remain robust although slower in some countries.
“The average growth among non-resource-intensive countries is projected to edge down, reflecting the effects of tropical cyclones in Mozambique and Zimbabwe, political uncertainty in Sudan, weaker agricultural exports in Kenya and fiscal consolidation in Senegal.
“In Central African Economic and Monetary Community countries, which are also resource-intensive, activities are expected to expand at a modest pace, supported by rising oil production.
“Growth among metals exporters is expected to moderate, as mining production slows and metal prices fall”, the African Pulse said.
The report also said that debt vulnerabilities remained high, adding that the share of countries in Sub-Saharan Africa assessed in debt distress or at high risk of external debt distress had almost doubled.
It, however, said that the pace of deterioration had slowed.
According to the African Pulse, the rising debt vulnerability stems from the high level of government debt, especially non-concessional debt, which led to a substantial rise in debt servicing costs.
It said that meanwhile, due to a widening in the current account deficits, foreign reserve buffers had declined in many countries.
“Reflecting these vulnerabilities, risks to the regional outlook remain tilted to the downside, including the possibilities of slower-than-expected global growth, sharper drops in commodity prices and poor implementation of policy reforms.”
The report also said that global uncertainty was taking a toll on growth well beyond Africa and that real Gross Domestic Product (GDP) growth was also expected to slow significantly in other emerging and developing regions.
According to it, the Middle East and North Africa, Latin America, Caribbean and South Asia regions are expected to see even larger downward revisions in their growth forecasts than in Sub-Saharan Africa for 2019.
Mr Hafez Ghanem, the World Bank Vice President for Africa, said empowering women would help boost growth in Africa.
“African policy makers face an important choice: business as usual or deliberate steps toward a more inclusive economy.
“After several years of slower-than-expected growth, closing the opportunity gap for women by removing barriers to their economic participation is the best way forward,” he said
Mr Albert Zeufack, Chief Economist for Africa also at the World Bank, said Africa’s economies were not immune to what was happening in the rest of the world and that this was reflected in the subdued growth rates across the region.
“At the same time, evidence clearly links poor governance to poor growth performance, so efficient and transparent institutions should be on the priority list for African policy makers and citizens.”
The 20th edition of Africa’s Pulse includes special sections on accelerating poverty reduction and promoting women’s empowerment.
Under the special topic: “Accelerating Poverty Reduction and Empowering Women”, it said four in 10 Africans, or more than 416 million people, lived below 1.90 dollars per day in 2015.
It added that significant efforts to create economic opportunities and reduce risk for poor people and extreme poverty would become almost exclusively an African phenomenon by 2030.
According to Africa’s Pulse, the poverty agenda in Africa should put the poor in control, help to accelerate the fertility transition, leverage the food system on and off the farm, address risk and conflict and provide more and better public finance to improve the lives of the most vulnerable.
“Sub-Saharan Africa is the only region in the world that can boast that women are more likely to be entrepreneurs than men, and African women contribute to a large share of agricultural labour across the continent.
“This success is stifled by large and persistent earnings gaps between men and women.
“Women farmers in Sub-Saharan Africa produce 33 per cent less per hectare of land than men do and female entrepreneurs or business owners earn 34 per cent less profits than male business owners.
The publication, however, identified six policy pathways for women’s economic empowerment.
It listed building women’s skills beyond traditional training, alleviating women’s financial constraints through innovative solutions that relieve the collateral problem and improve their access to the financial sector and helping women secure their land rights.
Others are connecting women to labour, addressing social norms that constrain women’s opportunities and building a strong new generation by helping girls to navigate their adolescence.