The World Bank is projecting a 3.1 per cent growth in Sub-Saharan African in 2019 and a 3.6 per cent growth in 2020.
In a recent report, the group says that growth in sub-Saharan will be at 2.7 per cent in 2018 representing a slight increase from 2.3 per cent in 2017.
The group also projects a slow growth within non-resource rich economies which have been among the first rising saying that countries like Rwanda, Kenya and Ivory Coast, which have been growing at about 6 per cent in the continent, will see a slight growth mostly because of an increase in oil prices.
According to the report, ‘’the dependent variable is gross capital inflows as a percentage of GDP. The different types of capital flows are also included as alternative dependent variables, namely, gross FDI inflows, gross PI inflows, and gross OI inflows.’’
The rising public debt in most African countries, however, continues to raise eyebrows with the lender.
‘’With fiscal deficits narrowing, government debt levels appear to have stabilized, but vulnerabilities remain high, especially among oil exporters and non-resource-rich countries. During 2012–17, government debt is estimated to have increased by more than 20 percentage points in the region. Debt rose in about two-fifths of the countries in 2017 and was above 60 per cent of GDP in one-third of the countries.’’ The report says.
Adding that the recent increase partly reflects the surge in Eurobond issuance.
‘’Although interest rates on foreign currency-denominated debt are generally lower than domestic interest rates in Sub-Saharan Africa, the increased reliance on foreign currency borrowing has heightened refinancing and interest rate risk in debtor countries.’’ Says the report.