Modest Growth Recovery in Sub-Saharan Africa
“Most countries do not have significant wiggle room when it comes to having enough fiscal space to cope with economic volatility. It is imperative that countries adopt appropriate fiscal policies and structural measures now to strengthen economic resilience, boost productivity, increase investment, and promote economic diversification,” notes Albert Zeufack, World Bank Chief Economist for Africa. Looking ahead, Sub-Saharan Africa is projected to see a moderate increase in economic activity, with growth rising to 3.2% in 2018 and 3.5% in 2019 as commodity prices firm and domestic demand gradually gains ground, helped by slowing inflation and monetary policy easing. However, growth prospects will remain weak in the Central African Economic and Monetary Community (CEMAC) countries as they struggle to adjust to low oil prices. The economic expansion in West African Economic and Monetary Union (WAEMU) countries is expected to proceed at a strong pace on the back of solid public investment growth, led by Côte d’Ivoire and Senegal. Elsewhere, growth is projected to firm in Tanzania on a rebound in investment growth and recover in Kenya, as inflation eases. Ethiopia is likely to remain the fastest-growing economy in the region, although public investment is expected to slow down.
“The outlook for the region remains challenging as economic growth remains well below the pre-crisis average,”says Punam Chuhan-Pole, World Bank Lead Economist and lead author of the report. “Moreover, the moderate pace of growth will only yield slow gains in per capita income that will not be enough to harness broad-based prosperity and accelerate poverty reduction.” Analysis shows that rising capital accumulation has been accompanied by falling efficiency of investment spending in countries where economic growth has been less resilient to exogenous shocks. This suggests that the inefficiency of investment—which reflects insufficient skills and other capabilities for the adoption of new technologies, distortive policies, and resource misallocation, among other things—will need to be reduced if countries are to capture fully the benefits of higher investment. As African countries seek new drivers of sustained inclusive growth, attention to skills building is growing. The Africa’s Pulse report dedicates a special section to analyzing how African countries, through smarter investments in foundational skills for children, youth, and adults, can leverage spending to achieve better learning outcomes that will simultaneously enhance productivity growth, inclusion, and the adaptability of Africa’s workers to the demands of today’s markets and those of the future. In most countries, skills-building efforts must strive to make spending smarter to ensure greater efficiency and better outcomes. Countries face two hard choices in balancing their skills portfolios: striking the right balance between overall productivity growth and inclusion, on the one hand, and investing in the skills of today’s workforce and tomorrow’s workforce, on the other hand. Investing in the foundational skills of children, youth, and adults is the most effective strategy to enhance productivity growth, inclusion, and adaptability simultaneously. Thus, all countries should prioritize building universal foundational skills for the workers of today and tomorrow. Source / More: World Bank Oil and Gas News Undiluted !!! “The squeaky wheel gets the oil” Follow us: @OilAndGasPress on Twitter | OilAndGasPress on Facebook ]]>