IMF foresees 16-year low sub-Saharan African growth in 2016

IMF says economic growth in sub-Saharan Africa will likely slow in 2016 to its weakest in 16 years due to slump in commodity prices, Ebola outbreak and drought

Photo by: AP (Archive )
Photo by: AP (Archive )

File photo shows a money changer counting Nigerian naira currency at a bureau de change, in Lagos, Nigeria, October 20, 2015.

Economic growth in sub-Saharan Africa will likely slow this year to its weakest in nearly two decades, hurt by a slump in commodity prices, the Ebola virus outbreak and drought, the International Monetary Fund (IMF) said on Tuesday.

In its African Economic Outlook, the IMF said the region would likely grow 3 percent this year - the lowest rate since 1999 - after expanding by 3.4 percent in 2015.

Growth was seen recovering to 4 percent next year, helped by a slight recovery in commodity prices, and the Fund said it was still optimistic about the region's prospects in the longer term.

Archive photo shows the almost dried-up local dam in Senekal, South Africa where taps and water sources have run dry, January 7, 2016. (AP Archive)

"However, to realise this potential, a substantial policy reset is critical in many cases," the Fund said.

Affected countries needed to contain fiscal deficits as the reduction in revenue from the commodities sector was expected to persist, it added.

A girl walks on a gas pipeline running through Okrika community near Nigeria's oil hub city of Port Harcourt December 4, 2012. (Reuters Archive)

Major oil exporters Angola and Nigeria were hardest hit by the slump in commodities prices, as were Ghana, South Africa and Zambia, the report said.

Guinea, Liberia, and Sierra Leone were only gradually recovering from the Ebola epidemic, while several southern and eastern African countries including Ethiopia, Malawi and Zimbabwe were suffering from a severe drought, the IMF added.

Archive photo shows health workers screening people for the Ebola virus before they enter Kenema Hospital in Kenema, Sierra Leone, August 9, 2014. (AP Archive)

On the upside, Côte d'Ivoire, Kenya and Senegal would see growth of more than 5 percent, mostly "supported by ongoing infrastructure investment efforts and strong private consumption," the report said.

"The decline in oil prices has also helped these countries, though the windfall has tended to be smaller than expected, as exposure to the decline in other commodity prices and currency depreciations have partly offset the gains in many of them," it added.