The economic growth in sub-Saharan Africa is down to 2.3 percent in 2018 from its average of 3.3 percent in the five previous years. World Bank published a report on Monday that the region's economy will swiftly recover due to the growth in its agriculture and mining sectors and as commodity prices bounce back. The recovery is expected to boost the region's output over the next two years.
The slowdown in the economy of the region is mainly caused by the weak performance in the three largest economies in the sub-Saharan African region, includes South Africa, Nigeria, and Angola. The three nations contribute almost 60 percent of the overall economic output of the region.
In 2018, both Nigeria and Angola suffered a decline in oil production. Oil accounts for almost half of the revenues of each nation. The growth of non-oil related activities produced a disappointing result in Nigeria. For South Africa, the recovery from recession was capped by low levels of investments which attributed a drop in business confidence in the country.
César Calderón, the lead author of the World Bank's Africa's Pulse report, said that their forecast for a rise in growth by 2020 is largely due to the anticipation that commodities and metal prices will continue to recover. He added that in South Africa, they expect that structural reforms will help boost consumer and business confidence and assist in the recovery of the country's manufacturing sector.
The report said that the data that they recovered point to a moderate strengthening in the region. It was stated that in the report that the growth in the region is projected to into 2.8 percent in 2019 and 3.3 percent in 2020. The World Bank's report concluded that the gradual recovery in growth is supported by exports and private consumption in the demand side and by a rebound in agricultural production and an increase in mining production and services in some countries in the supply side. The latest prediction for 2019 and 2020 is 0.5 and 0.3 percentage points, respectively, lower than the projection in the October issue of Africa's Pulse.
The region also needs to face external environmental challenges including economic activities in advanced economies and emerging markets and developing economies (EMDEs) continues deceleration and the global uncertainty caused by the prolonged trade dispute between the United States and China. The projected strength in the economy of the region is contributed by the stability of prices of metals and agricultural commodities.
