Sub-Sahara Africa’s GDP growth doubled from 1.4% in 2016 to 2.8% in 2017. Per capita GDP growth also increased from -0.9% in 2016 to 0.4% in 2017, and is estimated to reach 1.0% in 2018, according to a report by ISSER.
This is higher than the growth rates of Advanced Economies, EU and Latin America and the Caribbean among the major regional groups in the world, but lower than those of Emerging and Developing Asia and Emerging Market and Developing Economies
The pickup in SSA growth is attributed to factors such as “the more supportive external environment, including stronger global growth, higher commodity prices and improved market access” particularly the rebound in commodity prices, with oil prices being higher on average in 2017 than in 2016.
Indeed, SSA’s oil exporters (excluding Nigeria) experienced an increase in growth, from -1.3% in 2016 to -0.3% in 2017, or from -1.5% to 0.5% including Nigeria.
The SSA region seemed to have weathered the 2008 financial crisis reasonably well, especially in comparison with other regions of the world and with the region’s historical record (Fosu, 2013a).
The precipitous decline to 1.4% in 2016 was a major concern, making the doubling of the growth rate to 2.8% in 2017 a welcome development, signalling a possible return to a path of resiliency. Nonetheless, the 2017 growth rate is still well below the 2009 crisis value of 3.9% (IMF, 2017a).
An important difference between the current situation and the global economic crisis of 2009 appears to be that the external terms of trade (TOT) held up reasonably well for SSA generally.
In contrast, TOT has fallen substantially this time around, by as much as 9.7% between 2012 and 2017, with unfavourable implications for growth, though it has risen by 6.0% between 2016 and 2017 (IMF, 2018a).
The two largest SSA economies, Nigeria and South Africa, fared relatively well in 2017.
Nigeria, Africa’s largest economy and oil exporter, has been affected positively by the oil price rise in 2017, with government revenues increasing from 5.6% of GDP in 2016 to 6.0% in 2017, though this revenue share in 2017 represents a decline of more than 66 per cent from their zenith of 17.7% in 2011.
Correspondingly, Nigeria’s GDP growth rate increased from -1.6% in 2016 to 0.8% in 2017. Similarly, the country’s non-oil GDP growth also increased to 0.5% in 2017 from -0.3% in 2016, compared to 3.6% in 2015, 7.3% in 2014 and 8.3% in 2013.
The apparent growth recovery in 2017 is attributed to good harvests and a recovery in oil production after easing tensions in the Niger Delta.
The number of unemployed persons within sub-Saharan Africa will increase by 2.2 million by 2019. This will translate into a 7.6 per cent increase in the unemployment figure for the region.
The unemployment numbers for sub-Saharan Africa are expected to increase from 29.1 million to 31.3 million in 2019, according to ISSER,
The study indicates that the situation is worsened by the trickling effect of previous episodes of slow growth in the global economy.
Again, even though globally the vulnerable employment rate has dropped from 42.9% to 42.5% as at last year, that of developing countries like Ghana still hover at 76.5%.
According to ISSER, Ghana’s economy in 2017 performed well but called on the government to sustain such performance in 2018.
Speaking to JoyBusiness at the launch of the report, Director of ISSER, Felix Ankomah Asante disclosed that Ghana’s GDP grew by 8.5% in 2017, an increase from the 3.7% rate in 2016, representing a substantial recovery from the downward trend beginning in 2012. According to him, such growth was mainly driven by oil exports.
“Ghana’s growth was buoyed by oil exports, but that was not the case in 2014, 2015 or 2016. Overall GDP growth exceeded non-oil growth from 2010 to 2013. Since 2014, however, the non-oil GDP growth rate outpaced overall GDP growth, with the gap widening in 2016,” he said.
The Chief Executive Officer of the Private Enterprise Foundation (PEF), Nana Osei Bonsu, said strict and prudent government spending could help sustain this growth pattern.
“We must maintain this growth. Government expenditure must be pruned and disciplined so we can sustain the macroeconomic growth,” he said.
ISSER’s report has over the years played a huge role in providing empirical-based knowledge on the economy.