Sub-Saharan Africa Growth To Slow To 3.7% In 2015, Says World Bank

Sub-Saharan Africa Growth To Slow To 3.7% In 2015, Says World Bank

From BusinessDayLive. Story by Ntsakisi Maswanganyi.

Sub-Saharan Africa’s economic growth will likely slow from 4.6 percent in 2014 to 3.7 percent this year, its lowest level since 2009, the World Bank says.

World Bank released its biannual Africa Pulse report Monday, which looks at the economic outlook for the region.

Slowing growth means sub-Saharan Africa will be the only developing region to miss global poverty reduction targets, said World Bank acting chief economist Punam Chuhan-Pole.

“Much needs to be done to accelerate the pace at which poverty is being reduced,” Chuhan-Pole said.

Growth is forecast to accelerate to 4.4 percent in 2016 and to 4.8 percent in 2017.

In South Africa, ongoing power and infrastructure bottlenecks made worse by “difficult” labor relations weighed heavily on economic growth, the report said.

The economic slowdown in China, lower commodity prices, and electricity supply challenges in countries such as South Africa and Zambia are among factors responsible for slower growth in the region, Chuhan-Pole said.

She said countries whose finances were depleted from investing to support the economy should  increase tax-to-revenue ratios, reform the tax administration, and simplift tax processes.

Governments also need to be more transparent about public spending and budgeting processes, and boost productivity in sectors such as agriculture, the report said.

Countries in the region whose economies could grow by 7 percent and more include Ethiopia, Mozambique, Rwanda and Tanzania, mainly because of large-scale public investments in infrastructure and continued investment in resources and consumer spending.

Read more at BusinessDayLive.