Economic growth in sub-Saharan Africa (SSA) decelerated to 3 percent in 2015 from 4.5 percent in 2014, as global commodity prices remain low, particularly oil, which fell 67 percent from June 2014 to December 2015. Weak global growth, especially in emerging market economies also contributed to poor growth, the World Bank’s latest projections show.
The figures show that SSA’s GDP per capita expanded by less than 0.5 percent, the worst since 2009. These are outlined in Africa’s Pulse, the World Bank’s biannual analysis of economic trends and latest data for the region.
The 2016 growth forecast remains subdued at 3.3 percent, way below the robust 6.8 percent growth in GDP that the region sustained in the 2003-2008 period.
With commodities accounting for more than 60 percent of sub Saharan Africa’s exports, the region was badly hit, especially oil-exporting countries, where average growth is estimated to have slowed from 5.4 percent in 2014 to 2.9 percent in 2015. Growth fell sharply in Nigeria, the Republic of Congo, and Equatorial Guinea. Growth was also poor in mineral-exporting countries, including Botswana, Sierra Leone, South Africa and Zambia. However, growth remained buoyant in some parts of the region, including Côte d’Ivoire, Ethiopia, Rwanda, Kenya, Tanzania.
There is therefore a need for African countries to accelerate the pace of structural reforms aimed at boosting competitiveness and diversification, especially with external conditions likely to remain less favourable than in the past. “In most countries this will mean improving the business climate, reducing the cost of cross-border trade, reforming the energy sector to ensure affordable, reliable, and sustainable energy services, and making the financial sector more inclusive,” Punam Chuhan-Pole, World Bank Africa acting chief economist and author of the Africa Pulse said.
Overall, growth is projected to pick up in 2017-2018 to 4.5 percent. The projected pickup in activity in 2017–18 reflects a gradual improvement in the region’s largest economies—Angola, Nigeria, and South Africa—as commodity prices stabilize and policies become more supportive of growth.