World Bank Global Economic prospects (June Report) outlined despite a ‘fragile’ global economy prospects, growth in Sub-Saharan Africa is recovering, supported by modestly rising commodity prices, strengthening external demand, and the end of drought in a number of countries. Security threats have subsided in several countries. Several factors are preventing a more robust recovery.
Yet, in contrast to oil and metals prices, some commodity prices have plummeted, e.g. cacao, reducing exports and fiscal revenues in Côte d’Ivoire, Ghana, and other cocoa producers. The drought in East Africa has also continued into 2017, adversely affecting economic activity in Kenya, and contributing to famine in Somalia and South Sudan.
However, the region is expected to have positive outlook. Growth in Sub-Saharan Africa is forecast to pick up to 2.6 percent in 2017 and to 3.2 percent in 2018, predicated on moderately rising commodity prices and reforms to tackle macroeconomic imbalances. Most importantly growth in non-resource intensive countries is anticipated to remain solid, supported by infrastructure investment, resilient services sectors, and the recovery of agricultural production. Among SSA economics with positive growth trajectory the star performer is Ethiopia. Ethiopia is forecast to expand by 8.3 percent in 2017, Tanzania by 7.2 percent, Côte d’Ivoire by 6.8 percent, and Senegal by 6.7 percent. According to the report “In non-resource intensive countries, growth should remain robust. Large low-income countries in Sub-Saharan Africa (e.g., Ethiopia, Tanzania) will expand at a rapid pace, helped by buoyant service sectors, infrastructure investment, and a rebound in agriculture.” (World Bank Global Economic Prospects, June 2017, p 19)
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