Mr Albert Zeufack, the Chief Economist for Africa World Bank, has urged African governments to ratify and implement the Continental Free Trade Agreement (CFTA) to reduce trade volatility and spur African economic growth.
He urged African countries to invest in digital infrastructure to boost access to broad band connectivity, adding that effective implementation of the free trade policy would strengthen regional value chain for enhanced development.
Mr Zeufack said this on Monday at a video conference at the launch of this year’s African’s Pulse report, a bi-annual analysis of issues shaping Africa’s economic future.
The report showed that growth in sub-Saharan Africa was downgraded to 2.3 per cent for 2018, down from 2.5 per cent in 2017.
It attributed low growth to domestic macroeconomic instability, including; poorly managed debt, inflation, and deficits; political and regulatory uncertainty; and fragility that were having visible negative impacts on some African economies.
The report found out that fragility in a handful of countries was costing Sub-Saharan Africa over half a percentage point of growth per year, which added up to 2.6 percentage points over five years.
“The drivers of fragility have evolved over time, and so too must the solutions,” said Cesar Calderon, Lead Economist and Lead author of the report.
“Countries have a real opportunity to move from fragility to opportunity by cooperating across borders to tackle instability, violence, and climate change.”
Mr Zeufack said the digital transformation can increase growth by nearly two percentage points per year and reduce poverty by nearly one percentage point per year in Sub-Saharan Africa alone, describing the phenomenon as a game changer for Africa.
The report showed that Ghana’s growth reached 6.2 per cent in 2018, down from 8.1 per cent in 2017 and the world Bank is projecting Ghana’s growth of 7.6 per cent in 2019, above Ghana’s projection of 7.2 per cent.
According to the report, Nigeria’s growth reached 1.9 percent in 2018, up from 0.8 percent in 2017, reflecting a modest pick-up in the non-oil economy.
However, South Africa came out of recession in the third quarter of 2018, but growth was subdued at 0.8 percent over the year, as policy uncertainty held back investment.
Angola, the region’s third largest economy, remained in recession, with growth falling sharply as oil production stayed weak.
Mr Zeufack said growth picked up in some resource-intensive-countries like the Democratic Republic of Congo and Niger, as stronger mining production and commodity prices boosted activity alongside a rebound in agricultural production and public investment in infrastructure.
“Countries like Liberia and Zambia, growth was subdued, as high inflation and elevated debt levels continued to weigh on investor sentiment. In the Central African Economic and Monetary Community, a fragile recovery continued as reform efforts to reduce fiscal and external imbalances slowed in some countries”.
He said non-resource-intensive economies such as Kenya, Rwanda, Uganda, and several in the West African Economic and Monetary Union, including Benin and Côte d’Ivoire recorded solid economic growth in 2018.
The CFTA created a single continental market for goods and services, with free movement of business persons and investments and as well pave way for accelerating the establishment of the Continental Customs Union.