World Bank: Economic growth in Africa down to 1.6 pct
by Anadolu Agency
KIGALIOct 04, 2016 - 12:00 am GMT+3
by Anadolu Agency
Oct 04, 2016 12:00 am
Economic growth in Sub-Saharan Africa is projected to fall to 1.6 percent in 2016, the lowest level recorded in over two decades, according to a recent World Bank report.
"Low commodity prices and tight financial conditions, exacerbated by domestic headwinds from policy uncertainty, droughts, and political and security concerns, continued to weigh on activity across the region," Thursday's report said, adding that the overall slowdown reflected economic deterioration in the region's largest economies, with economic performance being notably weak across oil exporters.
Comparatively, the continent had achieved average real annual GDP growth of 5.4 percent between 2000 and 2010, adding $78 billion annually to GDP, according to the World Bank. However, between 2010 and 2015, the growth started to slow down to 3.3 percent annually.
Despite this negative outlook, the report noted economic growth was showing signs of resilience. "While many countries are registering a sharp slippage in economic growth, some countries - Ethiopia, Rwanda, and Tanzania - are continuing to post annual average growth rates of over 6 percent, exceeding the top tercile of the regional distribution; and several other countries - including Côte d'Ivoire and Senegal - have moved into the top tercile of performers."
"The ‘established' and ‘improved' performers tend to have a stronger quality of monetary and fiscal policies, better business regulatory environment, more diverse structure of exports, and more effective public institutions," it said.
Herman Musahara, economist at the School of Economics, University of Rwanda, told Anadolu Agency that Rwanda's positive outlook was hinged on the government's insistence on implementing good macroeconomic policies.
"It is not enough to have good macroeconomic policies. What is really important is making sure that these policies are actually implemented on the ground. That is probably the biggest difference between Rwanda, Ethiopia and many other African nations," Musahara said.
"For the last decade, Rwanda has been exemplary in all sectors. There has been an economic miracle of sorts that has helped to shield Rwanda against external economic shocks. "There is a problem of unimplemented policies all over the continent. What the Rwandan government did was to deliberately put up the infrastructure and conducive environment that help it float even in bad economic times," he added.
The World Bank advised sub-Saharan governments to increase agricultural output and adjust macroeconomic policies in order to address their fiscal vulnerabilities.