An aerial view of the Special Economic Zone. Rwanda is the only country that is projected to grow above 8 per cent. (File)
The World Bank Group forecasts that
the Sub-Saharan Africa economy will grow by an...
estimated 2.9 per cent in
2020, recovering from 2.4 per cent growth recorded last year.
In its ‘Global Economic Prospects’ report
released on Wednesday this week, the institution said regional growth
is expected to pick up depending on investor confidence improvement in
some large economies, and energy bottlenecks ease.
A pickup in oil production contributes to
recovery in oil exporters and robust growth continues among agricultural
commodity exporters, the economic outlook indicates.
Among the region’s exporters of agricultural
commodities, sustained strong public infrastructure spending, combined
with increased private sector activity in Madagascar, Rwanda, Uganda, is
expected to continue to support output, the report’s authors observed.
According to the report, continued reforms
to raise the productivity and competitiveness of export-oriented
sectors, such as in Burkina Faso and Côte d’Ivoire, will also support
output.
Rwanda is the only country that is projected to grow above 8 per cent.
Canisius Bihira, an economist based in
Kigali, asserts the 8.1 forecasted growth is within an ideal range given
the trend at which the domestic economy has been growing at.
The Rwandan economy grew by 8.4 per cent in
the first quarter of 2019 and a double digit growth of 12.2 per cent was
recorded in the second quarter (April to June).
In the third quarter, economic growth averaged 12 per cent.
Bihira thinks government extended support
towards key sectors like agriculture will determine the extent to which
that growth will be realized.
“The government needs to support agriculture
particularly crop production and [agricultural] export services for
this growth to be realized,” he noted.
Bihira added that support in the form of
loans from financial institutions towards the agriculture is also
important to boost the economy.
Elsewhere
In Cote d’Ivoire, the economy is expected to
grow at 7 per cent, Ghana’s economy is forecast to grow at 6.8 per cent
followed Benin at 6.7 per cent, Uganda at 6.5 per cent and Ethiopia at
6.3 per cent.
In Kenya, the largest economy in the East African region, growth is expected to edge towards 6 per cent.
In South Africa, growth is expected to edge
up to 0.9 per cent, assuming the new administration’s reform agenda
gathers pace, policy uncertainty wanes, and investment gradually
recovers.
Increasingly binding infrastructure
constraints especially in electricity supply are expected to inhibit
domestic growth, while export momentum will be hindered by weak external
demand.
Growth in Nigeria is expected to edge up to 2.1 per cent.
Growth in Angola is anticipated to
accelerate to 1.5 per cent only if ongoing reforms provide greater
macroeconomic stability, improve the business environment, and bolster
private investment.
In the West African Economic and Monetary Union, growth is expected to hold steady at 6.4 per cent.
Global picture
The global economic growth projects a growth
of 2.5 per cent in 2020 as investment and trade gradually recover from
last year's significant weakness, but downward risks persist, the World
Bank said.
That is a slight increase from 2.4 per cent
last year. That had been the weakest performance since the 2008
financial crisis and a significant slowdown from growth rates above 3
per cent in 2017 and 2018.
The bank’s revised outlook represents a
downgrade from its last forecast in June when it had expected growth to
be 0.2 percentage-points higher this year.
The forecast also trimmed its expectation
for global growth by 0.2 percentage points over the next two years to
moderate rates of 2.6 per cent in 2021 and 2.7 per cent in 2022.
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