World Bank: Africa’s 3.1% Growth Not Fast Enough to Eradicate Poverty

Albert Zeufack, World Bank Africa Region Chief Economist, and Punam Chuhan-Pole, World Bank Africa Region Lead Economist, and author of Africa’s Pulse during the 2018 WBG-IMF Spring Meetings. Photo: Dasan Bobo/World Bank

Accra, Ghana, April 18, 2018//-World Bank says Sub-Saharan Africa’s economic growth of 3.1 percent in 2018, is not fast enough to eradicate poverty on the African continent.

Albert G. Zeufack, World Bank Chief Economist for the Africa Region flanked by Punam Chuhan-Pole, World Bank Lead Economist and Michael Toman, a senior manager at the bank made this known at the launch of this year’s Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank.

“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said . “African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth”, Dr Zeufack stated.

The growth forecasts are premised on expectations that oil and metals prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment, according to him.

He noted that the moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa.

“Elsewhere, economic activity will pick up in some metals exporters, as mining production and investment rise. Among non-resource intensive countries, solid growth, supported by infrastructure investment, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal”.

Growth prospects have strengthened in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth; in Ethiopia, growth will remain high, as government-led infrastructure investment continues.

“For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production,” said Punam Chuhan-Pole, World Bank Lead Economist and the author of the report.  “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda.”

Rising public debt

Public debt relative to GDP is rising in the region, and the composition of debt has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones. Higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability: 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013.

“By fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth,” said Dr Zeufack.

Leveraging tech and better governance to boost power

Michael Toman , Lead Economist on Climate Change in the Development Research Group and Manager of the Environment, Energy, and Agriculture team noted that substantial cost reductions from rapid technological improvements in home-made solar power productions offered opportunities to improve the lives of people without access to electricity in more lightly populated rural and remote areas of Sub-Saharan Africa.

This year’s edition of Africa’s Pulse has a special focus on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction.

The report finds that achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems. Improving regulation of the electricity sector and better management of utilities remain key to success.

African Eye Report

 

 

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