Economic growth in Africa increases amidst rising public debt


-World Bank reports 

April 20, 2017 By Patrick Jaiah Kamara

World Bank Chief Economist for Africa, Albert G. Zeufack

According to the new Africa Pulse-a bi-annual analysis of the state of African economies conducted by the World Bank, economic growth in Sub-Saharan Africa was increasing amidst rising public debt in the region.

The report was launched yesterday at Washington via tele-conference held at the World Bank’s country office in Freetown, Sierra Leone.

According to the report, the region was showing signs of recovery and that regional growth was projected to reach 2.6% in 2017.

It however stated that the recovery remains weak with growth expected to rise only slightly above population growth.

The 116 pages report stated among other issues, that public debt was on the rise in Sub Saharan Africa and that some countries have borrowed to finance much-needed infrastructure programs.

The report noted that public debt in the region has continued to rise amid large fiscal deficits and weak growth, adding  that between 2014 and 2016, six countries including Sierra Leone, Zimbabwe Mauritania, DR Congo, Sao Tome and Principe and Mozambique had more than 20% increase in public debt.

“Public debt levels are sustainable to the extent that the funds borrowed generate returns that allow timely repayment. However, some countries in the region are caught in an environment of low growth prospects, widened fiscal deficits, weaker currencies and could face problems in replaying their debts,” the report stated.

For infrastructural development, the report stated that Sub-Saharan Africa ranks at the bottom of all developing regions in virtually all dimensions of infrastructural performance.

However, the World Bank Chief Economist for Africa, Albert G. Zeufack, recommended that the region needed to bring in more private sectors that would invest in the countries, so that they would catch up with the rest of the world in terms of infrastructural development.

“In sub Saharan Africa, infrastructural growth is at 2.6% from our projection. This is definitely better than the 1.3% growth the region recorded in in 2016- the lowest in two decades. But we are not out of the wood yet, because Africa is growing at negative per capital rate,” he said.

He noted that the region needed to further strengthen macro and fiscal policies and structural policies to keep the trend growing and to hopefully reach the bridge for Structural reform.

Access to electricity, especially in Sierra Leone and five other countries is low at 35% of the population, with rural access rates at less than one-third of urban ones.

The report stated that the low growth in sub-Saharan Africa is reflected in part in the investment growth slowdown the region has experienced and the sharp drop in investment growth in 2015 across public and private investment.