Growth in sub-Saharan Africa is forecast to drop to 3 percent this year from 3.4 percent in 2015 as low oil prices and the commodity slowdown hit producers, according to an IMF report released Tuesday.
The decline in oil prices will affect top regional oil producers Nigeria and Angola, although the impact has so far been limited, the International Monetary Fund said.
Nigeria’s growth forecast was lowered to 2.3 percent, from 2.7 percent in 2015, while Angola could slip to 2.5 percent, down from 3 percent.
“The effect of the decline in oil prices on the region’s oil-importing countries has been smaller than expected, as many of these economies export other non-renewable resources,” said the report titled “Too slow for too long”.
Last week Angola announced that it was to begin discussions with the IMF to seek support to shore up its economy in the wake of falling oil revenues.
Angola depends on oil production for 95 percent of its export earnings and more than half of government receipts.
The report said growth in sub-Saharan Africa was projected to pick up to 4 percent on 2017, stimulated by “a small rebound in commodity prices and timely policy implementation.”
“Resource intensive countries have suffered from the decline in commodity prices, while the region’s frontier markets are adversely affected by tighter global financing conditions,” it said.
The cooling of the Chinese economy, which is the leading destination for Africa’s commodities, contributed to weakening growth.
South Africa, the continent’s most advanced economy, was expected to see growth halved to 0.6 percent in 2016 owing to “lower export prices, elevated policy uncertainty and tighter monetary and fiscal policy.”
The country is battling to avoid a credit downgrade to junk status following a stretch of poor growth, a bad drought and a weak currency which has stoked inflation.
The drought has also hampered electricity production in Zambia, adding pressure on low copper prices, and led to food shortages in Zimbabwe.
Growth in Ethiopia, said to be the worst affected by recent drought, was projected to slump to 4.5 percent, from 10.2 percent the previous year.
© 1994-2016 Agence France-Presse
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