The World Bank has predicted the Economic Growth in the Sub- Saharan Africa region for its 2018 Global Economic Prospects.
The report states that the region, which is estimated to have a 2.4 percent growth in 2017, is projected to rise to 3.2 percent this year.
“Regional growth is projected to rise to 3.2 percent in 2018, and to an average of 3.6 percent in 2019-20. These forecasts are broadly unchanged from June, and assume that commodity prices will firm and domestic demand will gradually strengthen, helped by slowing inflation,” states the report.
Although the region is experiencing some growth, Sub Saharan Africa’s economies are facing challenges with the rising government debts.
“On the domestic front, excessive external borrowing, in the absence of sound forward looking budget management, could worsen debt dynamics and cause economic instability,” the report states.
“The rising government debt levels highlight the importance of fiscal adjustment to contain fiscal deficits and maintain financial stability.”
“Structural policies—such as improvements in education and health systems, as well as labor market, governance, and business climate reforms—could help bolster potential growth across the region,” the report continues
The region’s economy bounced back in 2017 after slowing sharply to 1.3 percent in 2016, as commodity prices recovered, global financing conditions remained favourable, and slowing inflation lifted household demand according to the World Bank. The World Bank, Global Economic Report also projected South Africa, a regional economic giant to grow to 0.8 percent in 2018. Growth in the Nigerian economy is projected to be 2.5 percent and 1.6 for Angola in 2018. The global economic growth, which was facing challenges in recent years is projected to be 3.1 percent from 3 percent in 2017.
Despite the World Bank projects Zimbabwe’s 2018 economic growth to be 0.9 percent the country’s Minister of Finance Patrick Chinamasa argues this and forecasts a 6 percent growth. Chinamasa states that the growth of the economy of the economy is due to reforms by the country’s leader President Emerson Dambudzo Mnangagwa.