Fiscal deficit, which occurs when a government total expenditures exceed the revenue that it generates are expected to stabilize at their 2016 levels in Sub Saharan African countries according to the International Monetary Fund (IMF).
IMF’s October Regional Economic Outlook states that the deterioration of the fiscal balances, which is the money the government gets from taxes and assets taking into account spending experienced by many Sub Saharan African countries in recent years is expected to abate in 2017.
“Oil exporters are set to maintain their (weighted) average fiscal deficit at 5 percent of GDP in 2017, broadly unchanged from 2016, but their noncommodity primary deficit (of about 7½ percent of GDP in 2017) is expected to be about 0.3 percentage point of GDP higher than in 2016”, states the Regional outlook.
“In non-resource-intensive economies, the overall fiscal deficit is also expected to remain unchanged, but at about 5 percent of GDP, and with a shift in the composition of spending from current to capital.”
IMF’s economic outlook also says that the broad-based slowdown in sub-Saharan Africa is easing, but the underlying situation remains difficult. The Sub- Saharan economies are facing difficulties as public debt rose above 50 percent of GDP
in 22 countries at end-2016.
“Debt servicing costs are becoming a burden, especially in oil-producing countries, and in Angola, Gabon, and Nigeria are expected to absorb more than 60 percent of government revenues in 2017”, states the IMF’s Economic Outlook.
“Growing exposure to the sovereign and the accumulation of domestic arrears have magnified pressures in the financial sector, as evidenced in higher nonperforming loans (Angola, Ghana, Nigeria), a sharp decrease in the growth of credit to the private sector (CEMAC, Zambia), and bank under-capitalization (Nigeria).”
“Growth is expected to pick up from 1.4 percent in 2016 to 2.6 percent in 2017, reflecting one-off factors—particularly, the rebound in Nigeria’s oil and agricultural production, the easing of drought conditions that impacted much of eastern and southern Africa in 2016 and early 2017—and a more supportive external environment.”
The Regional Economic Outlook: Sub-Saharan Africa is published twice a year, in the spring and fall, to review developments in the continent. The Outlook has been reporting on the economic developments in Sub-Saharan Africa since 2003