Africa’s economy is in a slump for the first time in two decades

Published October 11, 2016 by lagmen
A worker walks past an electronic board displaying movements in major indices, at the Johannesburg Stock Exchange in Sandton

The economic outlook for Africa keeps getting worse. Growth in the 45 countries that make up Sub-Saharan Africa will drop to its lowest level in more than 20 years, says the International Monetary Fund. It projects a drop to 1.4% this year, less than half last year’s 3.5% and way below the 5% plus the region enjoyed between 2010 and 2014.

The IMF blames falling commodity prices and continued weakness in global financial markets for the slide. And things are not turning around any time soon. Abebe Aemro, the director of the African department at the IMF said that near-term prospects, particularly in oil-exporting countries, have worsened in recent months. Terrorism and humanitarian crises in countries like Nigeria, Cameroon and Chad have also contributed to the malaise.

And African nations, he says, are not helping themselves. “The policy response in many of the countries that have been mostly affected by these shocks have also been delayed and unfortunately, incomplete, raising uncertainty, deterring private investment and stifling new sources of growth,” Abebe said.

The IMF’S forecast echoes recent World Bank predictions, which showed growth in the region falling to 1.6% in 2016—the lowest in over two decades.

But economic prospects for the region aren’t uniformly bleak. In fact, according to the IMF, about 19 countries, like Côte d’Ivoire, Ethiopia, Senegal, and Tanzania, continue to show robust growth.

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