Sub-Saharan African growth to slow to 3.8% in 2015: IMF
After enjoying boom years, sub-Saharan Africa's commodity exporting economies face a grim 2015 as China's once-voracious appetite for raw materials wanes, the IMF warned Tuesday.
Activity may gather pace next year, however, as oil prices recover, the International Monetary Fund said in its closely watched World Economic Outlook report.
Economic growth in sub-Saharan Africa is set to slow to 3.8 percent this year from 5.0 percent last year, the IMF said.
“The slowdown in 2015 is primarily driven by the repercussions of declining commodity prices, particularly those for oil, as well as lower demand from China — the largest single trade partner of sub-Saharan Africa,” the Fund said.
Growth in the region’s biggest oil exporters, Nigeria and Angola, is expected to slow sharply when compared to last year, it said.
The IMF said growth for the sub-Saharan region was expected to pick up in 2016 to 4.3 percent, however, as external demand and oil prices recovered.
Africa’s most advanced economy, South Africa, was projected to show growth of less than 1.5 percent in 2015 and 2016 due to poor electricity supply and high unemployment.
The effect of plunging commodity prices has already led mining companies in countries such as South Africa and Zambia to slash workforces, shut operations and reduce capacity.
Zambia, which relies on copper exports for 70 percent of its foreign earnings, has seen the value of its currency, the kwacha, fall by nearly half against the dollar so far this year.
In contrast, the IMF predicted Ivory Coast, Democratic Republic of the Congo, Ethiopia, Mozambique and Tanzania would record growth of seven percent or more this year and next.