Declining commodity prices lower sub-Sahara Africa GDP growth to 4% – World Bank

Projections for sub-Sahara Africa’s GDP growth for 2015 has been lowered to 4 percent in 2015 from 4.5 percent in 2014 as a result of declining prices of commodities including oil, the World Bank says.

According to the Bank’s twice-yearly analysis of issues shaping Africa’s economy, ‘Africa’s Pulse’, which was published today April 13, 2015, the downturn reflects the fall in the prices of oil and other commodities.

The Bank notes that the 2015 forecast is below the 4.4 percent average annual growth rate of the past two decades, and well short of Africa’s peak growth rates of 6.4 percent in 2002 to 2008.

According to the publication, because sub-Sahara Africa is a net exporter of oil and other commodities, the region is vulnerable to the adverse commodity price shock.

“Falling commodity prices will weigh heavily on exporters of these commodities. Putting pressure on the current account and fiscal balances,” it says.

It also notes the regions’ oil exporters, which accounted for nearly half of the region’s GDP in 2014, have been especially hard hit by weakening terms of trade.

“Their economies depend heavily on oil for export receipts and fiscal revenues and are especially vulnerable to oil price movements,” it says.

Other factors that threaten Africa’s growth, the Bank says, are persistent conflict in a number of areas, and recent violence by extremist groups such as Boko Haram and Al Shabaab.

By Emmanuel K. Dogbevi