Sub-Saharan Africa economic growth will slow down this year hurt by falling oil and other commodity prices in the international market, the World Bank said in its latest forecast on the region.
The Breton Wood institution forecast that gross domestic product growth for sub-Sahara Africa will slow to 4.0 percent this year, compared to 4.5 percent growth in 2014. This, the banks said, would be below the region’s average of 4.4 percent over the last two decades.
“Despite strong headwinds and new challenges, Sub-Saharan Africa is still experiencing growth. And with challenges come opportunities,” Makhtar Diop, World Bank vice president for Africa, said in a statement.
“The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty.”
The region’s growth peaked at 6.4 percent between 2002 and 2008, fuelled by a rise in commodity prices like coffee, tea, metals and oil that a good number of African countries export to the rest of the world.
Excluding South Africa, whose economy has slowed down in recent years due to lethargic labor unrest and an energy crisis due to an aging power grid, the World Bank said the average growth for the rest of Sub-Saharan Africa in 2015 could be around 4.7 percent.
“As previously forecast, external tailwinds have turned to headwinds for Africa’s development. It is in these challenging times that the region can and must show that it has come of age, and can sustain economic and social progress on its own strength,” Francisco Ferreira, the World Bank’s chief economist for Africa, said.
“For starters, recent gains for the poorest Africans must be protected in those countries where fiscal and exchange rate adjustments are needed.”