The International Monetary Fund (IMF) has projected sub-Saharan Africa among regions in the world to record accelerated economic growth in 2019 and 2020.
One-third of sub-Saharan economies are expected to post growth above five percent, raising optimism of impressive performance amid a slowdown in global growth and a year when external shocks, including trade tensions, rising U.S. interest rates, dollar appreciation, capital outflows and volatile oil prices are expected to continue.
In its World Economic Outlook report for 2019, the IMF revealed that GDP growth in sub-Saharan Africa will rise from 2.9 percent posted last year to 3.5 percent this year, and 3.6 percent in 2020.
The projection is, however, a 0.3 percentage point lower, caused by declining crude oil prices. Growth for oil-producing countries Angola and Nigeria has been significantly impacted by the decline, which has seen oil prices plummet from a high of $85 per barrel and are expected to average $60 this year. More so, the report indicates that challenges of ballooning debt, expanding recurrent expenditures and a slowdown in revenue mobilization will continue to curtail growth in the region.
“Across all economies, measures to boost potential output growth, enhance inclusiveness and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives,” the IMF said.
Gloomy outlook for the global economy?
The IMF forecasts that 2019 will not be a good year for the global economy, whose growth is projected to decline to 3.5 percent from 3.7 percent last year, largely caused by an escalation in trade wars between the U.S. and China. The U.S. has imposed import taxes on steel, aluminium and hundreds of Chinese products, drawing retaliation from Beijing and other American trading partners like Mexico and Canada.
According to the report, other factors for global growth slowdown include the controversial process of Britain’s exit from the European Union (Brexit), Italy’s financial struggles, volatile commodity prices. Rising interest rates in the U.S. are also projected to impact heavily on the global economy.