Managing Debt and Mobilizing Resources: A Delicate balance to Sustain Economic Growth
In 2019, the economic outlook of sub Saharan Africa will strengthen, due largely to a combination of higher commodity prices, a stronger global economy, and supportive domestic policies. The latest projections have the region’s aggregate gross domestic product (GDP) growth stepping up to 3.8 percent this year, up significantly from the 2.6 percent average growth rate of the past four years. Thereafter, growth will rise to just over 4 percent by 2023. The aggregate contour masks significant differences across countries. Importantly, despite notable improvements, economic growth remains weak in Angola, Nigeria, and South Africa, the continent’s largest economies, with growth averaging under 2.5 percent—which is comparable to the rate of population growth—over the next five years. These large economies remain at risk of a lost decade (flat per capita GDP) unless policymakers implement significant reforms to reduce dependence on oil in Angola and Nigeria and, in the case of South Africa, to overcome structural problems—many inherited from the apartheid era.