David Malingha Doya Nairobi
AFRICA’S economy will probably expand this year at the same rate as previously but half a percentage point lower than the forecast made in April amid the outbreak of the Ebola virus in four West African countries, and insecurity in at least five other nations.
The economy was forecast to grow at 5 percent this year, driven by infrastructure investment, a buoyant services sector and strong agriculture production, the International Monetary Fund (IMF) said yesterday. The forecast is below the 5.5 percent the fund said in April would be Africa’s growth rate this year.
More than 4 500 people have died in Guinea, Liberia and Sierra Leone since the outbreak of Ebola in December.
“The Ebola outbreak could have much larger regional spillovers, especially if it is more protracted or spreads to other countries, with trade, tourism, and investment confidence severely affected,” according to the IMF.
“In Ebola-affected countries, fiscal accounts are likely to deteriorate, and, where public debt is manageable, fiscal deficits should be allowed to widen temporarily,” it said.
Worsening insecurity stemming from civil wars and terrorist attacks could also curb Africa’s economic growth, according to the IMF. “The security situation continues to be difficult in Central African Republic and South Sudan, and remains precarious in northern Mali, northern Nigeria, and the coast of Kenya.”
Domestic economic challenges could also curb growth in countries like South Africa that were facing difficult labour relations, the IMF said.
In Ghana and Zambia, “large macroeconomic imbalances have led to pressures on the exchange rate and inflation”. – Bloomberg