Africa’s economic powerhouse impeding growth — IMF

Africa’s economic powerhouse impeding growth — IMF
October 09 23:38 2018

By Benjamin Orisemeke

The International Monetary Fund (IMF) has said that Nigeria, South Africa and Angola the three largest economies in Africa are impeding its economic growth.

The Fund therefore called on the three countries to ensure solid economic footing in order to accelerate the continent’s economic growth.

The IMF Chief Economist, Mr. Maurice Obstfeld, who made the call the unveiling of the October 2018 World Economic Outlook, in Bali, Indonesia, observed that their proper footing would check impediment of the growth of the African economy.

According to Obstfeld, the continent would continue to experience slowdown in growth as long as the three largest economies were not performing up to their potentials.

“Nigeria’s growth is at 1.9 per cent this year to 2.3 per cent next year and South Africa with 0.8 per cent this year, Angola contracting by 0.1 per cent this year.

“So the aggregate is over three per cent this year and close to four per cent next year and this is in spite of the fact that the largest economies in the continent are doing poorly.”

Obtsfeld, however, said the continent could do much better once the countries got solid economic footing, particularly South Africa and Nigeria.

“This is because they are really large countries and their economic activities will always have effect on their neighboring countries,’’ he said.

According to the report, Africa’s growth performance varies according to countries, while about half of the expected pickup in growth between 2017 and 2018 reflects the growth rebound in Nigeria.

“Nigeria’s growth is projected to increase from 0.8 per cent in 2017 to 1.9 per cent in 2018 and 2.3 per cent in 2019 (0.4 percentage point higher than in the April 2018 WEO for 2019).

“This is buoyed by the impact of recovering oil production and prices,” the report indicated.

It also said that inflation pressures in sub-Saharan Africa had broadly softened, with annual inflation projected to drop to 8.6 per cent in 2018 and 8.5 per cent in 2019, from 11 per cent in 2017.

“For Nigeria, inflation is projected to fall to 12.4 per cent in 2018, from 16.5 per cent in 2017 and to rise to 13.5 per cent in 2019.

The report said that global growth was projected at 3.7 per cent for 2018-19, which is 0.2 percentage point lower for both years than was forecast in April.

The IMF, however, advised countries to foster cooperation and work together to tackle challenges that extend beyond their borders