The global economic prospects recently published by the World Bank indicate that 2018 could be a year of optimism even if the figures do not call for immediate celebration, especially in Sub Sahara Africa. While some major economies in Africa like Angola, Nigeria, and South Africa are said to continue with positive growth rates, Ethiopia has been cited by the report as having the best growth prospects of 8.2 percent in 2018 which is expected to stabilise at 7.8 percent both in 2019 and 2020.
Overall, the modest positive trends announced for 2018 have been justified by an improvement in commodity prices as metal exporters in Sub Sahara Africa have been experiencing moderate rebound due to an ‘uptick in mining output amid rising metals prices.’ Counting on the strengthening of domestic demands, the good days could last if structural reforms are enhanced otherwise demographic and investment trends may play negatively. Other such setbacks could be an abrupt slowdown in China that may generate adverse spillovers to the region through lower-than-projected commodity prices; protracted period of heightened political and policy uncertainty, which could further hurt confidence and deter investments, and the possibilities that commodity prices will remain weak and so on.
Examining the Central African Economic and Monetary Community, CEMAC, the report points out that growth will remain subdued but will improve gradually as countries keep adjusting to low oil prices. A further factor that could bring about hope in the CEMAC zone is favourable weather conditions which experts say may improve power generation and support private investments. Also, there are chances for a combination of slow inflation and monetary reform policies that can ease and support growth. Cameroon that has often been referred to as the locomotive of the CEMAC sub-region continues to show signs of resilience as drop witnessed from 5.8 percent in 2015 to 4.5 in 2016 will stabilize at 4.3 in 2019 and 2020 following the 4.1 percent forecast this year.
Outside the largest economies like Angola, Nigeria and South Africa; Ghana is likely to benefit from the pickup as an increase in oil and gas production will lift exports.
Apart from economic factors that have been impacting growth, there are concerns such as political transition in South Africa and Zimbabwe that the World Bank report identified as situations to watch out if growth indicators must remain primordial. Thus, unfolding political transitions, droughts, conflicts, and worsening security conditions would weigh down on economic activities especially in fragile countries.
Consequently, while the lull last in 2018 the need for policy action that can assure inclusive growth, checking rising government debt levels, highlighting the importance of fiscal adjustments to contain deficits and maintaining financial stability are key issues to tackle. There are also structural policies such as improvement in education and health care, governance and business climate reforms that emphasis needs to be laid on for the economic indicators to remain positive.