ADDIS ABEBA – Sub Saharan Africa economy is expected to show 3.3% growth in 2020, World Bank’s altest report says, as growth in emerging market and developing economies is expected to stabilize next year.
The latest growth forecast for Sub Saharan Africa was made with the assumption that investor sentiment toward some of the large economies of the region improves.
The anticipation was also made with the expectation of oil production will recover in large exporters, and that robust growth in non-resource-intensive economies will be underpinned by continued strong agricultural production and sustained public investment.
“Even in areas where pushing back poverty has made inroads, economic growth has been concentrated in urban areas, providing little benefit to the rural poor,” says the World Bank’s June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment reports.
“While per capita GDP is expected to rise in the region, it will nevertheless be insufficient to significantly reduce poverty,” it adds.
The report forecasts growth in South Africa to rise to 1.5 percent while growth in Angola is anticipated to pick up to 2.9 percent and growth in Nigeria is expected to edge up to 2.2 percent next year.
The trio are the biggest economies in the region.
Elsewhere in the region, growth is expected to rise to 4.9% next year.
The recovery among industrial commodity exporters will be supported by investment in new oil and gas capacity in Cameroon and Ghana, and increased mining in metal exporting countries, including Democratic Republic of the Congo and Guinea.
All in all, growth in the emerging and developing world is expected to pick up next year as the turbulence and uncertainty that afflicted a number of countries late last year and this year recedes, the World Bank’s June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment reports.
A number of risks could disrupt that delicate momentum, according to the Bank.
The risks are a further escalation of trade disputes between the world’s largest economies, renewed financial turmoil in emerging and developing economies, or a more abrupt deceleration of economic growth among major economies than is currently envisioned.
Of particular concern is a slowdown in global trade growth to the lowest level since the financial crisis ten years ago and a tumble in business confidence.
“Stronger economic growth is essential to reducing poverty and improving living standards,” said David Malpass, World Bank Group President.
“Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential,” he continued.
“It is urgent that countries make significant structural reforms that improve the business climate and attract investment,” he said. “They also need to make debt management and transparency a high priority so that new debt adds to growth and investment.”
Meanwhile, the report claims the global economic growth is expected to slow to 2.6 percent in 2019—below previous projections—and to gradually rise to 2.8 percent by 2021.