The
World Bank has projected that despite its current fiscal travails
occasioned by huge losses of revenue on crude oil exports, Nigeria would
begin to experience economic growth recovery as from next year.
The
Bank, in its Africa’s Pulse, a twice-yearly analysis of issues shaping
Africa’s economic prospects published yesterday at the start of the
World Bank’s 2015 Spring Meetings in Washington, D. C., noted that
although the nation’s economy would suffer this year, growth is expected
to rebound in 2016 and beyond.
This prediction is predicated on the expected impact of the reforms to diversify the economy.
Putting the projected growth rate of Sub-Saharan Africa at 4.0 per cent this year, down from the 4.5 per cent recorded in 2014, the Bank stated that the region’s economic downturn largely reflected the fall in the prices of oil and other commodities, signaling an end to the commodity super-cycle that had been experienced for several years
The Bank stated: “The 36 African countries with expected terms-of-trade deterioration are home to 80 per cent of the population and 70 per cent of the economic activity in the region.
“That said, the continent’s huge economic diversity is also mirrored in the impact of commodity price declines – even among oil producers.
“In Nigeria, for example, although the economy will suffer this year, growth is expected to rebound in 2016 and beyond, driven by a relatively diversified economy, and a buoyant services sector. Low oil prices will continue to weigh down on prospects of less diversified oil exporters such as Angola and Equatorial Guinea.
“In several oil-importing countries, such as Cote d’Ivoire, Kenya and Senegal, growth is expected to remain strong. In Ghana, still high inflation and fiscal consolidation will weigh on growth. In South Africa, growth continues to be curtailed by problems in the electricity sector.”
According to the Breton Woods institution, this year’s Sub-Saharan Africa growth forecast of 4.0 per cent is below the 4.4 percent average annual growth rate of the past two decades and well short of Africa’s peak growth rates of 6.4 per cent in 2002-2008.
It stated further that excluding South Africa, the average growth for the rest of Sub-Saharan Africa would be around 4.7 per cent.
Reflecting on the growth prospects, World Bank Vice President for Africa, Makhtar Diop, noted that despite the challenges facing sub-Saharan African economies occasioned by the lull in global commodities market, the options for the economies to sustain growth abounded still.
“Despite strong headwinds and new challenges, Sub-Saharan Africa is still experiencing growth. And with challenges come opportunities.
The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty,” Diop said
The Bank noted that Africcan exports were still dominated by primary commodities, with oil as the most important commodity traded in the region, followed by gold and natural gas.
It stated that over ninety percent of the total exports of eight major oil-exporting countries derived from the three biggest exports of each country, which represent nearly 30 per cent of their GDP, adding however that the recent price declines are not confined to oil.
Africa’s Pulse revealed that the prices of other commodities were now more closely correlated both with oil prices and with oneanother, consequent upon which terms of trade are declining widely among most countries in the region.
On foreign direct investment, the Bank noted that inflows to Sub-Saharan Africa were subdued in 2014, reflecting slower growth in emerging markets and declining commodity prices. It pointed out that African countries continue to tap international bond markets to finance infrastructure projects.
For instance, it reported that while Cote d’Ivoire returned to the market this February and Ethiopia had a debut issue in December 2014, debt burdens remained generally manageable, debt-to- GDP ratios for countries with increased bond market access picked up in recent years.
The Bank also reported that despite the bright prospects for the economies, uncertainty about future global monetary conditions remained an additional reason for caution. World Bank’s Chief Economist for Africa, Francisco Ferreira, said: “As previously forecast, external tailwinds have turned to headwinds for Africa’s development.
“It is in these challenging times that the region can and must show that it has come of age, and can sustain economic and social progress on its own strength. For starters, recent gains for the poorest Africans must be protected in those countries where fiscal and exchange rate adjustments are needed.”
This prediction is predicated on the expected impact of the reforms to diversify the economy.
Putting the projected growth rate of Sub-Saharan Africa at 4.0 per cent this year, down from the 4.5 per cent recorded in 2014, the Bank stated that the region’s economic downturn largely reflected the fall in the prices of oil and other commodities, signaling an end to the commodity super-cycle that had been experienced for several years
The Bank stated: “The 36 African countries with expected terms-of-trade deterioration are home to 80 per cent of the population and 70 per cent of the economic activity in the region.
“That said, the continent’s huge economic diversity is also mirrored in the impact of commodity price declines – even among oil producers.
“In Nigeria, for example, although the economy will suffer this year, growth is expected to rebound in 2016 and beyond, driven by a relatively diversified economy, and a buoyant services sector. Low oil prices will continue to weigh down on prospects of less diversified oil exporters such as Angola and Equatorial Guinea.
“In several oil-importing countries, such as Cote d’Ivoire, Kenya and Senegal, growth is expected to remain strong. In Ghana, still high inflation and fiscal consolidation will weigh on growth. In South Africa, growth continues to be curtailed by problems in the electricity sector.”
According to the Breton Woods institution, this year’s Sub-Saharan Africa growth forecast of 4.0 per cent is below the 4.4 percent average annual growth rate of the past two decades and well short of Africa’s peak growth rates of 6.4 per cent in 2002-2008.
It stated further that excluding South Africa, the average growth for the rest of Sub-Saharan Africa would be around 4.7 per cent.
Reflecting on the growth prospects, World Bank Vice President for Africa, Makhtar Diop, noted that despite the challenges facing sub-Saharan African economies occasioned by the lull in global commodities market, the options for the economies to sustain growth abounded still.
“Despite strong headwinds and new challenges, Sub-Saharan Africa is still experiencing growth. And with challenges come opportunities.
The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty,” Diop said
The Bank noted that Africcan exports were still dominated by primary commodities, with oil as the most important commodity traded in the region, followed by gold and natural gas.
It stated that over ninety percent of the total exports of eight major oil-exporting countries derived from the three biggest exports of each country, which represent nearly 30 per cent of their GDP, adding however that the recent price declines are not confined to oil.
Africa’s Pulse revealed that the prices of other commodities were now more closely correlated both with oil prices and with oneanother, consequent upon which terms of trade are declining widely among most countries in the region.
On foreign direct investment, the Bank noted that inflows to Sub-Saharan Africa were subdued in 2014, reflecting slower growth in emerging markets and declining commodity prices. It pointed out that African countries continue to tap international bond markets to finance infrastructure projects.
For instance, it reported that while Cote d’Ivoire returned to the market this February and Ethiopia had a debut issue in December 2014, debt burdens remained generally manageable, debt-to- GDP ratios for countries with increased bond market access picked up in recent years.
The Bank also reported that despite the bright prospects for the economies, uncertainty about future global monetary conditions remained an additional reason for caution. World Bank’s Chief Economist for Africa, Francisco Ferreira, said: “As previously forecast, external tailwinds have turned to headwinds for Africa’s development.
“It is in these challenging times that the region can and must show that it has come of age, and can sustain economic and social progress on its own strength. For starters, recent gains for the poorest Africans must be protected in those countries where fiscal and exchange rate adjustments are needed.”
0 Comments
Good day precious one, We love you more than anything.