The International Monetary Fund, IMF, said on Saturday it foresees economic growth in Sub-Saharan Africa dropping this year to its lowest level in more than 20 years.
Current projection is put at about 1.4 per cent, less than half of last year’s figure of 3.5 per cent and 5 per cent recorded between 2010 and 2014.
The worst affected countries, the Fund said, would be Nigeria, Angola and six countries in the Central African monetary — economic and monetary union, currently under severe economic pressures.
In his review of the region’s economic outlook, IMF Director for African Department, Abebe Selassie, blamed the development on the negative impact of commodity prices and tightening financial market conditions.
Mr. Selassie said the way forward to address the current challenges the region was facing involved policy requirements to promote strong, durable and inclusive growth.
He said the delay in policy response in most countries affected by the shocks has heightened the uncertainty, deterring private investment and stifling fresh sources of growth.
Regardless, Mr. Selassie warned against pessimism to the region’s economic prospects of growth.
The Fund said the multi-speed growth in the 1.4 per cent regional aggregate growth this year over-shadowed the prevailing diversity across the region.
Almost half of the 45 countries in the region, including Côte d’Ivoire, Ethiopia, Senegal, and Tanzania, he noted, would continue to enjoy robust growth, with economic output set to expand by 6 per cent or more by this year.
The IMF projected a modest pickup in economic activity provided a strong action is taken to push for quick reforms.
Mr. Selassie pointed out a coherent set of policies to facilitate more orderly adjustment process and a quicker growth recovery.
He said Nigeria and other countries worst affected by the declining commodity prices must strike a better balance between increased investment spending and debt sustainability considerations.
“We’re strongly advocating reforms aimed at increasing revenue mobilization, which will be particularly helpful, of course, by containing fiscal deficits while sustaining increased investments,” the IMF said.