Economic growth in Sub-Saharan Africa is expected to pick up from 2.7 percent to 3.4 percent in 2019 according to the World Bank 2019 Regional Outlook.
Growth in the region was slower than expected in 2018 partly due to weaknesses in Angola, Nigeria, and South Africa
The Regional Outlook states that the 2019 Sub Saharan Africa growth is predicated on the diminished policy uncertainty and improved investment in large economies, together with continued robust growth in non-resource intensive countries.
World Bank predicts global growth to be at 2.9 percent this year.
Sub- Saharan Africa, however, faces risks as slower growth in China and the Euro area would adversely affect the region through lower export demand and investment according to the World Bank. Sub Saharan African countries have strong ties in trade and investment links with Europe and China.
“Moreover, Sub-Saharan African metals producers would likely be among the hardest hit by escalating trade tensions between China and the United States, as metals prices would fall faster than other commodity prices as a result of weakening demand from China,” the World Bank says.
“Furthermore, a faster-than-expected normalization of advanced-economy monetary policy could result in sharp reductions in capital inflows, higher financing costs, and disorderly exchange rate depreciation, especially in countries with weaker fundamentals or higher political risks.”
“Sharp currency declines would make the servicing of foreign currency-denominated debt, already a rising concern in the region, more challenging.”
The World Bank’s domestic related risks facing Africa this year include political uncertainty and a concurrent weakening of economic reforms which continue to weigh on the economic outlook in many countries.
“In countries holding elections in 2019 (e.g., Malawi, Mozambique, Nigeria, South Africa), domestic political considerations could undermine the commitment needed to rein in fiscal deficits or implement structural reforms, especially where public debt levels are high and rising,” the World Bank says.
“Insurgencies and armed conflicts, with their adverse effects on economic activity, remain an important risk in several countries.”
“Adverse weather shocks and rising financial sector stress are additional risks.”
The World Bank expects Zimbabwe to economically grow by 3.7 percent this year.
Business in Zimbabwe, however, has already lost millions of dollars due to violent protests that took place this year as well as the government internet shut down in response to the chaos in the country’s urban areas.