JOHANNESBURG - Sub-Saharan Africa has Nigeria to thank for better economic growth prospects next year.
The region’s economy will probably expand by 3.8percent in 2019, the International Monetary Fund said in its World Economic Outlook update, released yesterday. That compares with a 3.7percent prediction in April.
The upgraded forecast “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. Gross domestic product (GDP) in Africa’s most populous nation will probably rise 2.3 percent, lifting its estimate from 1.9 percent in April.
Nigeria’s economy is recovering from the worst contraction in 25 years in 2016, which was caused by lower oil prices and output and shortages of foreign exchange to import raw materials. The IMF held its predictions for South Africa's economy, saying it will expand 1.5 percent this year and 1.7 percent the next.
“Despite the weaker-than-expected first-quarter out-turn in South Africa, the economy is expected to recover somewhat over the remainder of 2018 and into 2019, as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the fund said.
South Africa hasn't grown at more than 2percent a year since 2013. GDP shrank the most in almost a decade in the first quarter, as former President Jacob Zuma handed the reins to Cyril Ramaphosa. Zuma spent close to nine years in power, during which time the nation lost its investment-grade credit rating and policy uncertainty and unemployment increased.
Nigeria and South Africa’s economies account for about half the region’s GDP.