Recently, both the International Monetary Fund and World Bank updated their outlook for 2018 and beyond. According to their reports, Sub-Saharan African (SSA) region growth in FY-18 is estimated to come in lower than initially forecasted in their earlier reports. Also, the outlook across the big three economies in the region – Nigeria, South Africa, and Angola – relative to other smaller economies, is expected to remain underwhelming.
In Nigeria, higher oil prices and recuperated production volumes are expected to buoy economic growth but the slow pace of reforms in the non-oil sector remains a cap to any potential upside. In South Africa (which technically entered recession in Q2-18) growth is expected to be modest in FY-18 amid uncertainties in the run-up to the 2019 general elections. Angola’s economy is expected to shrink marginally in FY-18, following a 2.5% contraction in FY-17. On the flip side, economic activity has remained solid in the fastgrowing economies, such as Kenya, Ethiopia, and Rwanda, aided by agricultural production and services on the production side, as well as household consumption and public investment on the demand side.
Overall, the slower pace of recovery in the big three economies will continue to drag the pace of recovery in the broader SSA economy.
UNITED CAPITAL RESEARCH