‘Africa Economic Growth Rebounds, But Not Fast Enough’ – World Bank 2018 Report
Monrovia – According to the New Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, economic growth in Sub-Sahara Africa is projected to pick up at 3.1 percent in 2018, and a firm average of 3.6 percent in 2019 -2020.
Augustine T. Tweh, [email protected]
The report is the 17th Edition of the New Africa’s Pulse the focuses on the economic growth of the of Sub-Saharan Africa specifically in electricity, technology innovation and the high risk of public debt relative to GDP.
The recent data point to a moderate strengthening of economic growth in the Sub-Saharan region, emphasizing that the growth forecasts are premised on the expectations that oil and metals prices will remain stable, and that governments in the region should implement reforms policies to address macroeconomic imbalances and boost investment.
According to World Bank Chief Economist for Africa Region, Albert G. Zeufack, by embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate economic growth.
“Growth has rebound in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels. African governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth. By fully embracing technology and leveraging innovation, African can boost productivity across and within sectors, and accelerate growth,” Zeufack said.
According to the report, achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, asserting that improving regulation of the electricity sector and better management of utilities remain a key priority.
The report added that low access rates and lack of reliable and affordable electricity present a challenge to rapid economic development in Africa, adding that Sub-Saharan Africa’s household electrification rate the lowest in the world.
“The region’s household electrification rate averaged 42% in 2016. There is variation in electricity access across countries, with some fragile countries having rates less than 10%. There are also huge disparities in electricity access between rural and urban households. Aside from low access, the region is also facing issues such as low consumption, low reliability, high per kilowatt cost, and utilities running at loss,” the report adds.
“Leapfrogging over the traditional stages of national grid-based electrification will require a combination of different systems to answer diverse needs. Leveraging the private sector will be critical to scaling-up electrification,” said Punam Chuhan-Pole, World Bank Lead Economist and author of the report.
Chuhan-Pole added that improved governance of the electricity sector is a prerequisite to Sub-Sahara Africa’s economic growth regardless of the technical configurations used in expanding electricity.
She also noted that public debt relative to gross Domestic Products (GDP) is increasing in the region due to the higher debt burdens and increasing exposure to market risks and debt sustainability, as 18 countries are classified at high risk of debt in March of this year.
“For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production. This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda,” Chuhan-Pole said.