Abuja - Sub-Saharan Africa’s economic growth was expected to increase to 6 percent in 2014, from 5 percent this year, supported by investment in infrastructure and production capacity, the International Monetary Fund (IMF) said yesterday.
The IMF predicted in May that the region would grow 5.7 percent this year and 6.1 percent next year.
It said the downward revisions were due mainly to weaker global economic conditions, while budget delays in oil producer Angola and oil theft in top crude exporter Nigeria had also hurt growth.
Inflation was expected to decline for a third year to less than 6 percent next year, due to benign prospects for food prices and the continuation of prudent monetary policies.
The institution expected growth to pick up next year.
“The improvement relative to 2013 reflects higher global growth, especially in Europe, and other expected favourable domestic conditions,” the IMF said in its regional report, giving Nigeria’s electricity reforms and hopes of improved oil output there as an example.
“The main factor behind the continuing underlying growth in most of the region is… strong domestic demand, especially associated with investment in infrastructure and export capacity in many countries.”
Despite the strong growth outlook, the region remained vulnerable to lower commodity prices and a slowdown in developed and emerging economies, the report said.
The strongest growth would be felt in mineral-exporting and low-income countries, the IMF said, highlighting as examples the Ivory Coast, the Democratic Republic of Congo, Mozambique and Sierra Leone.
The World Bank has said it expected a growth rate of 5.3 percent for sub-Saharan Africa next year, which would be underpinned by strong private and public investment.
The IMF gave similar policy prescriptions to previous reports. It recommended African nations allow their currencies to depreciate if they were under pressure from low commodity prices or capital outflows rather than propping them up, except to prevent “disorderly market conditions”.
It also suggested African nations work to improve the ease of doing business and the collection of economic statistics for monitoring. – Reuters