The World Bank has projected that growth in emerging market and developing economies (EMDEs) as a whole, will strengthen to 4.5 percent in 2018 and an average of 4.7 percent in 2019 and 2020, as activity in commodity exporters continues to recover amid firming prices.
“Growth among EMDEs is estimated to have accelerated to 4.3 percent in 2017, reflecting firming activity in commodity exporters and continued solid growth in commodity importers” according to World Bank’s January 2018 Global Economic Prospect report.
Most EMDE regions were said to have benefited from export recovery as improvement in economic activity among commodity exporters took place, such as key economies including Brazil and the Russian Federation emerged from recession, rise in the prices of most commodities, improved confidence, diminished tightening policy and investment growth bottomed out after a protracted period of weakness.
“Nonetheless, the estimated pace of growth in commodity exporters in 2017, at 1.8 percent, was still subdued and not enough to improve average per capita incomes, which continued to stagnate after two consecutive years of contraction” according to bank.
Sub-Saharan Africa’s growth is projected to continue to rise to 3.2 per cent in 2018 and to 3.5 per cent in 2019, with continuous strengthening of commodity prices and gradual improvement of domestic demand.
Having experienced improved commodity prices, trade and investments, Nigeria’s economy is expected to grow over 2.4 percent in 2018 and its Gross Domestic Product (GDP) is projected to improve by 2.8 percent in 2019 and 2020.
Africa’s largest economy is anticipated to accelerate to a 2.5 per cent rate this year from one per cent growth in the year just ended; a forecast based on expectation that oil production will continue to recover and that reforms will lift non-oil sector growth.
“Growth in Angola is expected to increase to 1.6 per cent in 2018, as a successful political transition improves the possibility of reforms that ameliorate the business environment,” noted the report.
South Africa’s economy is forecast to edge up to 1.1 per cent growth in 2018 from 0.8 per cent in 2017. The Africa’s most industrialized economy recovery is expected to solidify, as improving business sentiment supports a modest rise in investment, however it was stated that there is the likelihood of policy uncertainty remaining, which could slow needed structural reforms.
Accordingly, Côte d’Ivoire is forecast to expand by 7.2 per cent in 2018, Senegal by 6.9 per cent; Ethiopia by 8.2 per cent, Tanzania by 6.8 per cent, and Kenya by 5.5 per cent as inflation eases.
Any unexpected activity in the United States and Euro Zone could have a negative impact on the region according to World Bank, which would subject the regional outlook for Sub-Saharan Africa to external and domestic risks.
The report also showed that Africa’s economy growth would remain below pre-crisis averages, partly reflecting a struggle in larger economies to boost private investment.
A possible tightening of global financial conditions could also cause a reversal in capital flows to the Sub-Saharan region while policy uncertainty could further hurt confidence and deter investment in some countries.
So long policy makers in Africa channel their focus on human investments, productivity in their countries is almost guaranteed.