Economic recovery in sub-Saharan Africa picks up steam as Nigeria returns to growth
September 26, 20171.7K views0 comments
Recent data confirms that the slow economic turnaround of the sub-Saharan Africa (SSA) region continued in the second quarter buoyed chiefly by recovery in Nigeria.
According to a preliminary estimate compiled by FocusEconomics, a Spain-based leading provider of economic analysis and forecast, regional GDP increased 2.4 percent annually in Q2, an acceleration from Q1’s 2.0 percent expansion and the best result since Q4 2015.
Chiefly behind the second quarter result was a recovery in Nigeria’s economy. GDP expanded for the first time since Q4 2015 thanks to higher oil output and positive dynamics in the agricultural sector.
In addition, GDP growth edged up in South Africa as improved weather conditions supported agricultural output. However, growth was still weak overall in the region’s most advanced economy as political uncertainty has eroded confidence and led to credit rating downgrades.
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Meanwhile, growth was steady in Mozambique and edged down slightly in Cote d’Ivoire. GDP data is not yet available for the remaining countries.
Kenya continues to be in the spotlight due to ongoing political limbo. On September 1, the supreme court nullified a fiercely-contested August election, increasing uncertainty and inflicting damage on growth prospects as politics take precedence over policy. A repeat vote will be held on 17 October as the country continues to grapple with a devastating drought that is ravaging the north of the country.
However, the regions economy seen faring better in 2018. Sub-Saharan Africa is expected to grow moderately this year, as volatile commodity prices and turbulent political scenes limit the recovery. GDP is seen expanding 2.5 percent.
“Next year, regional GDP growth is seen gaining steam as the recovery strengthens. However, the evolution of commodities prices will be key to the economy’s trajectory.,” FocusEconomics stated.
FocusEconomics analysts held their forecasts for 2018 unchanged this month and now see GDP growing 3.4 percent, which is unchanged from last month’s projection. Behind the stable forecast were unchanged projections for four of the region’s thirteen economies.
However, forecast were lowered for six economies, including Kenya, Nigeria and South Africa. Growth prospects were raised for Angola, Ethiopia and Ghana.
Cote d’Ivoire and Ethiopia are expected to be the fastest-growing economies next year, expanding 7.0 percent or higher. On the flip side, the region’s heavyweights will be the poorest performers: South Africa is expected to grow 1.3 percent, followed by Angola with a 2.6 percent increase and Nigeria with a 2.7 percent expansion.