IMF predicts growth challenges in Sub-Saharan Africa

The International Monetary Fund, IMF, has revealed through its 2015 edition of the Regional Economic Outlook: Sub-Saharan Africa, published twice a year, to review development that the region enjoyed full-bodied economic growth of 5 per cent in 2014.

This was however influenced by strong investment in mining and infrastructure and strong private consumption. That notwithstanding, 2015 is seemingly going to be tough for the economies of the region.

The Outlook, launched in Yaounde on April 28, 2015, reveals that activity will decelerate further in 2015, although with growth at 4.5 per cent. It reports that oil exporters are facing a challenging environment and their growth in 2015-16 is expected to average 4 3/4 per cent considerably down from 7 per cent expected in October 2014.

The report indicates that gross oil exports alone account for nearly one-fourth of oil exporters’ Gross Domestic Product, and (except Cameroon) for a large share of total exports. Net oil exporters, except Cameroon, derive more than 50 percent of their revenues from oil-related activities.

This explains why Cameroon unlike other oil exporters, is relatively affected by the oil drop shock though its growth indicators remain shaky.

Threats Security-related risks have recently come to the fore in some countries, with Boko Haram’s increased activities in Cameroon, Chad, Niger, and Nigeria.

Instances of violence in the Central African Republic, Mali, and South Sudan were also a blow, with such developments not only posing serious fiscal risks, but also, if worsened, would impact growth especially in agriculture, darken the political climate and deter domestic and foreign investors.

Slowed economies of the region have also been blamed on the complexities of implementing politically difficult policies stemming from elections in most countries of the region.

Turning The Tides Cameroon’s Minister of Finance, Alamine Ousmane Mey, chairing yesterday’s deliberations, said the stakes are high, with government determined to increase growth rate to 6.3 in 2015 as projected. Reforms have been taken. Alamine Ousmane Mey, says focus is on improving the business climate, broadening and securing tax revenue as well as reinforcing equity and the fight against international tax evasion.

Mario De Zamaroczy, Division Head in the International Monetary Fund’s African Department, stressed that the only way for the country to face shocks was by putting in place reforms for inclusive development. However, the sub-region will remain among the fastest-growing regions in the world, IMF reports.