Adams /Emmanuel Donkor, GNA
Accra, Oct 11, GNA - Sub-Saharan Africa’s economies are experiencing a modest recovery, with Gross Domestic Product growth in the region expected to rise to 2.4 per cent in 2017; from 1.3 per cent in 2016.
The 16th edition of Africa’s Pulse report, which reveals this, mentions the factors that powered the recovery as the stabilisation of commodity prices, such as natural gases and mining; strong global growth in investment and trade; and growth in equity investment.
The Africa’s Pulse is a bi-annual analysis of the state of African economies conducted by the World Bank.
The report delivered by Mr Albert Zeufack, Chief Economist, World Bank for Africa, reveals that the recovery was also led by the region’s largest economies-Nigeria and South Africa- which exited from recession.
Mr Zeufack said the report showed that headline inflation slowed across the region in 2017 amid stable exchange rates and slowing food price inflation due to higher food production.
“The report reveals that fiscal deficit have narrowed but continue to be high, as fiscal adjustment measures remain partial,” he said.
“As a result, government debt remains elevated and additional efforts are needed to address revenue shortfalls and contain spending to improve fiscal balances.”
He posited that looking ahead; Sub-Saharan Africa was projected to see a moderate increase in economic activity with growth rising to 3.2 per cent in 2018; and 3.5 per cent in 2019 as commodity prices firm and domestic demand gains ground.
Mr Zeufack noted that the economic expansion in the West Africa Economic and Monetary Union countries was expected to proceed at a strong pace on the back of solid public investment growth, led by Cote d’Ivoire and Senegal.
“Elsewhere, growth is projected 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 Chief Economist said report underscored a decrease in the efficiency of investment, especially in countries with less resilient economies.
This, he explained, was, particularly, true for skills development in Africa where countries must reconcile the fact that despite investing in building skills, public expenditure on education had increased sevenfold over the past 30 years.
He said the report urged African governments to tackle the skills gap that spans all demographics to boost innovation and adopt new technologies.
The report admonishes African Governments to strike the right balance between investing in overall productivity growth and inclusion and investing in the skills of today’s and tomorrow’s workforce.
Madam Punam Chuhan-Pole, a World Bank Lead Economist, said the outlook for the region remained challenging as economic growth remained well below the pre-crisis average.
The moderate pace of growth, she said, would only yield slow gains in per capita income that would not be enough to harness broad-based prosperity and accelerate poverty reduction.
Mr David Evans, also a World Bank Lead Economist, noted that sustained economic growth would be unattainable if the population did not have fundamental literacy and numeracy skills that allowed them to function as citizens and work towards their dream.
According to the report, investing in fundamental skills for all is a win-win approach that would allow African governments to enhance productivity growth, promote greater inclusion and ensure the adaptability of the workforce to the markets of the future.