SSA Growth Story: Unsynchronized

Friday, December 13,
2019 / 03:00PM / United Capital Research / Header Image
Credit: FDC

The economic growth in Sub-Saharan Africa (SSA)
region remained positive in 2019, though, dragged by the weak growth posted by
regional heavyweights Nigeria, South Africa, and Angola. Economic recovery
remained sluggish in Nigeria and Angola, as the volatilities in the crude oil
market, weighed on both countries economic growth. Similarly, economic
activities remained underwhelming in South Africa as power cuts – load-shedding
– levelled business sentiments.

Also, according to World Bank and IMF, Ethiopia,
Ivory Coast, Ghana, and Rwanda remained among the region’s fastest growing
economy in 2019, supported by improved governance, policy stability, higher
agriculture and services sector output. This buoyed the supply side activities;
even as stronger household consumption and public investment bolstered the
demand-side activities. Notably, Ghana recorded a slight slowdown in economic
activities as the country commenced life after the end of its 16th IMF bailout
program in Apr -19. Also, large interest payments to foreign holders of
government bonds kept Ghana’s current account in the deficit, despite an
improved trade balance which was bolstered by rising oil and gas exports.
Additionally, significant volatility in the foreign exchange markets, coupled
with elevated inflation, dampened investment sentiments in Ghana.

Looking ahead, we expect slow recoveries in the
larger economies to continue to constrain the strength of the regional growth
amid long-delayed reforms. Nonetheless, we expect growth in the smaller
economies to continue to support the region’s growth.