The economies of Sub-Sahara African (SSA) African countries will perform quite lower in 2015 than they did in previous years, the International Monetary Fund (IMF) has said.
This is due to the three factors of slump in global crude prices, incidence of terrorism and the outbreak of the Ebola Virus Disease (EVD) in some of the countries.
?Sub-Saharan Africa?s economy is set to register another year of solid economic performance with growth expected to reach 4? percent in 2015,? Antoinette Sayeh, Director of the IMF?s African Department, commented here on Tuesday while launching the April 2015 IMF ?Regional Economic Outlook: Sub-Saharan Africa?.
Sayeh said the region would continue to be one of the fastest growing in the world, second only to emerging and developing Asia.
?That said, the economic expansion will be at the lower end of the range experienced in recent years, mainly reflecting the impact of the sharp decline of oil and commodity prices over the last six months. But the impact of this shock will be highly differentiated across the region,? according to the senior IMF official.
There are eight net exporters of crude oil in the SSA, and Sayeh observed that these had been hard-hit by the crude oil price slumps.
?For these eight countries, average growth in 2015 is projected to be about 1? percentage points lower than in 2014 in response to this shock.
?However for most of the rest of the region, growth prospects remain favorable,? Sayeh added, explaining that the growth was expected to be stronger in most low-income and more fragile countries.
?These countries are enjoying the benefits of lower oil import bills although some are also feeling the impact of lower prices for their non-oil commodity exports,? said the IMF official.
While the baseline scenario is for solid growth, the IMF official cautioned policy makers to be mindful of risks that could still cloud the outlook.
This is against the backdrop of the global financial conditions which are tightening just as the region?s frontier markets are increasingly relying on Eurobonds to finance their large investment needs.
?The deteriorating security situation in some areas could also strain budgets and have an adverse impact on the near-term growth outlook, especially in the agricultural sector, while weakening prospects for foreign direct investment.
?In Guinea, Liberia and Sierra Leone, the Ebola outbreak is beginning to be controlled with a sharp decline in the incidence of new infections. However, 2015 will be another difficult year, with economic activity expected to be significantly depressed,? she stated.
Sayeh urged: ?For the region?s eight oil exporting countries, fiscal adjustment is a priority; policy makers should support an adjustment by allowing exchange rates to depreciate, where flexible exchange rate mechanisms are in place.?
Joe Abbey, (Ph D) a veteran Ghanaian economist and Executive Director of the Center for Policy Analysis (CEPA), commented that African commodity exporting countries should learn to add value to their products.
?Too much of Africa?s growth figures are induced by raw commodity export,? Abbey observed, adding: ?Such a scenario leaves the economies fragile to exogenous shocks.? Enditem