Owing to falling commodity prices and tighter global financial conditions, the World Bank has cut its growth estimate for sub-Saharan Africa to the lowest since 2009 – 3.7%.
“The dramatic, ongoing drop in commodity prices has put pressure on rising fiscal deficits, adding to the challenge in countries with depleted policy buffers,” the World Bank’s acting chief economist, Punam Chuhan-Pole, was cited by business news agency, Bloomberg, as saying.
The World Bank said in its bi-annual Africa’s Pulse report that the prices of natural gas, iron ore and coffee had fallen by more than 25% since June 2014, and in countries such as South Africa, Zambia and Ghana, domestic factors including power shortages, were further hindering output.
“To withstand new shocks, governments in the region should improve the efficiency of public expenditures, such as prioritising key investments, and strengthen tax administration to create fiscal space in their budgets,” Chuhan-Pole reportedly said.
