Meanwhile, according to the OECD’s latest analysis, South Africa’s private consumption in particular will see expansion as wages increase moderately. Investment is anticipated to improve as policy uncertainty is presumed to ease gradually. High oil prices and a weak currency will support inflation to the upper part of the 3 – 6% target range. Monetary policy will need to address upward pressure on inflation while growth is low. It should remain accommodative to boost growth, but tighten moderately in case inflation continues to rise. The government budget deficit is to remain high, relative to GDP. Credible structural policy reforms are required in order to broaden competition and economic opportunities, which will bolster growth. The World Bank’s analysis also revealed that, for oil exporters in the Central African Economic and Monetary Community (CEMAC), recovery will be slower than previously expected, as they continue to adjust to high debt levels and low external buffers. Among non-resource intensive countries, activity in 2018 and 2019 – 20 is expected to remain robust. Significant growth, buttressed by infrastructure investments, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal. Growth prospects have increased in most of East Africa, owing to improved agriculture sector growth following droughts and a rebound in private sector credit growth. Growth in Ethiopia will remain the highest in the region, as government-led infrastructure investment carries on. However, many challenges remain. Public debt levels are on the rise, which could jeopardise debt sustainability in some countries; the availability of good jobs has not kept pace with the volume of entrants in the labour force; meanwhile, poverty is widespread. Although the region’s per capita gross domestic product (GDP) growth should be positive in 2018’s final figures, it will remain insufficient to reduce poverty significantly. “Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said Albert G Zeufack, World Bank Chief Economist for the Africa Region. “African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth.”
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Global Awards 2019
“For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production,” noted Punam Chuhan-Pole, World Bank Lead Economist. “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda.” Public debt relative to GDP is rising in the region, and the composition of debt has shifted, as countries have moved away from traditional concessional methods of financing towards more market-based sources. Higher debt burdens and the increasing exposure to market dangers raise concerns about debt sustainability: 18 countries were classified at a high threat of debt distress in March 2018, compared with eight in 2013. “There are grounds for optimism,” added Hafez Ghanem, World Bank Vice President for the Middle East and North Africa Region. “Now is the time to focus on creating more jobs and economic opportunities for youth. The positive outlook is an opportunity to speed up reforms for a renewed private sector as an engine of growth and job creation.” The World Bank and the GCC countries have been strong partners for more than five decades. Governments in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE have benefited from the Bank’s global knowledge and development experience through technical assistance programmes offered by the World Bank on a reimbursable advisory services (RAS) basis. The RAS portfolio in the GCC reflects the priorities of the Bank’s Middle East and North Africa region strategy: improving service delivery, promoting economic diversification, strengthening governance and enhancing the social protection and pension systems. These are all key areas of focus in GCC countries, and have been instrumental in recovery and reconstruction initiatives. In fiscal year 2018, the GCC RAS programme volume was more than US$50 million, and further growth is projected for 2019.