According to the World Bank’s bi-annual analysis of the state of Africa, Nigeria’s recent exit from a five- quarter recession and South Africa’s recovery after two consecutive quarters of negative growth as well as improved global conditions, has boost growth.
Rising energy and metal prices as well as increasing capital inflows have improved the public finances of commodities exporters. However, the recovery is not even across the regions. Growth in non-resource countries such as Ethiopia and Senegal have remained stable, underpinned by infrastructure investment and improved crop harvest.
“Increased output and investment in the mining sector and rising metal prices has enabled a rebound in activity,” the report states.
Regionally, economic expansion in the West African Economic and Monetary Union (WAEMU) countries is expected to proceed at a strong pace on the back of solid public investment as growth is led by Senegal and Cote’ d’Ivoire. In east Africa, growth is expected to firm up owing to a rebound in Tanzania following investment growth and recovery in Kenya as inflation eases. Ethiopia is expected to retain its growth lead although public investment is expected to slow down.
“Most countries do not have significant wiggle room…it is imperative that countries adopt appropriate fiscal policies and structural measures now to strengthen economic resilience” says Albert Zeufack, World Bank Chief Economist for Africa.
Looking ahead, growth in SSA is projected to rise to 3.2 percent next year and 3.5percent in 2019 as commodity prices firm and domestic demand gradually gains ground, helped by slowing inflation and monetary easing.