Africa's GDP growth rate to Slowdown



Sub-Saharan Africa countries are continuing to grow, although at a slower pace, due to a more challenging economic environment. 

According to new World Bank projections, Growth will slow in 2015 to 3.7 percent from 4.6 percent in 2014, reaching the lowest growth rate since 2009.These latest figures are outlined in the World Bank’s new Africa’s Pulse, the biannual analysis of economic trends on the continent.
Overall, growth in the region is projected to pick up to 4.4 percent in 2016, and further strengthen to 4.8 percent in 2017.

Africa’s Pulse notes that overall decline in growth in the region is due to several factors and vary from country to country.

For example, In Ghana, South Africa, and Zambia, domestic factors such as electricity supply constraints are further stemming growth.

Fiscal deficits across African countries are now larger than they were at the onset of the global financial crisis. Rising wage bills and lower revenues is leading to a widening of fiscal deficits in most countries.
Growth in Sub-Saharan Africa will be repeatedly tested as new shocks occur in the global economic environment. This underscores the need for Governments to embark on structural reforms to alleviate domestic impediments to growth, the report notes.

Investments in new energy capacity, attention to drought and its effects on hydropower, reform of state-owned distribution companies, and renewed focus on encouraging private investment will help build resiliency in the power sector.

Governments can boost revenues through taxes and improved tax compliance. Complementing these efforts, governments can improve the efficiency of public expenditures to create fiscal space in their budget.

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