Sub-Saharan Africa to be one of world’s fastest growing regions: World Bank
According to the Global Economic Prospect, Mauritius GDP is expected to attain 3.9% by the end of this year which is an increase of 0.5% compared to last year, taper to 3.7% in 2016 and remain at that rate in 2017. (Image: Forbes)
The Global Economic prospect published by The World Bank has reported in its latest edition that Sub-Saharan Africa’s growth is expected to remain one of the fastest and will attain regional growth rates of 5.1% by 2017, lifted by infrastructure investment, increased agricultural production and buoyant services.
According to the report, Mauritius GDP is expected to attain 3.9% by the end of this year which is an increase of 0.5% compared to last year, taper to 3.7% in 2016 and remain at that rate in 2017.
Moreover, the current account deficit which was set at -10.8% at the end of 2014 is expected to shrink on a yearly basis, where by the end of this year it is forecast to reach -10.0 %, compared to -9.4% in 2016 and -8.7% in 2017.
Coming to the wider region, growth picked up moderately in Sub-Saharan Africa in 2014, to an average of about 4.5 percent compared with 4.2 percent in 2013
The reasons of this moderate increase in GDP is due to the fact that Sub-Saharan African countries have faced several threats namely, South Africa is constrained by strikes in the mining sector, electricity shortages, and low investor confidence; Angola suffered a set-back in terms of a decline in oil production; the Ebola virus which severely disrupted the economic activity in Guinea, Liberia, and Sierra Leone; and finally Nigeria, the largest economy in Africa, has expanded at a robust pace, supported by a buoyant non-oil sector.
Excluding South Africa, the average growth for the rest of the region was 5.6 percent; additionally, the growth was also strong in many of the region’s low-income countries, including Côte d’Ivoire, Mozambique, and Tanzania.
Nevertheless, FDI flows are projected to remain flat in 2015 and sovereign bond issuance will slow as global financial conditions gradually tighten.
Among frontier market countries, growth is expected to increase in Kenya, boosted by higher public investment and the recovery of agriculture and tourism. Growth should remain strong in Zambia, as new large copper mining projects start producing and agriculture continues to get better.
Finally, in the baseline forecast, growth remains robust in most low-income countries, with the good quality of infrastructure investment and agriculture expansion, although soft commodity prices dampen activity in commodity exporters.
Additionally, South Africa is expected to experience slow but steady economic growth, helped by improving labor relations, gradually increasing net exports, and reforms to alleviate bottlenecks in the energy sector.
In Nigeria, the devaluation of the naira will push up inflation and slow growth this year, but with continued expansion of non-oil sectors, particularly the services sector which actually accounts for more than 50 percent of GDP as well as agriculture and manufacturing, growth is expected to rise in 2016 and build on the progress.
Furthermore, real GDP growth is expected to strengthen in fragile states, such as Madagascar, as investment rises on the back of improved political stability. Thus, oil importers would benefit from low oil prices, especially as the prices of their agricultural commodities, including coffee, cocoa, and tobacco, remain stable.
Finally, according to the report with the baseline forecast assumes that the economic impact of Ebola would be concentrated in Guinea, Liberia, and Sierra Leone the epidemic would cause a moderate economic loss in West Africa by the end of 2015.
However, as outlined by the report if a good program is not set up on time for effective intervention, the virus could spread more widely than assumed in the baseline forecast, and could reach large urban centers and new countries.