Sub-Saharan Africa (SSA) is projected to grow a little above four per cent next year from the three and half per cent recorded this year, the International Monetary Fund (IMF), has said.
The Fund said the Gross Domestic Product (GDP) growth would be influenced by the improved business and macroeconomic environment prevailing in the region.
Presenting the Regional Economic Outlook for SSA, the IMF Resident Representative, Ms. Natalia Koliadina, further stated that the ongoing infrastructure, investment and privatisation in most of the region’s low-income countries would catapult the growth of the region.
However, she said falling commodity prices present a gloomy economic picture for the region in the medium term, stressing studies by the Fund indicated that commodity prices would further dwindle.
She said the growth buffers which had underpinned the region’s solid growth performance in the past decade had dissipated.
According to Ms. Koliadina, SSA countries which were less rich in natural resources were doing better than the natural-resource rich countries.
“In most of the region’s low-income countries growth is holding up, supported by ongoing investment and solid private consumption,” she said.
On the international competitiveness of the region, she said, the region fell below its counterparts in Latin America, saying the business competitiveness of the region has been “deteriorating”.
She said even though the cost of communication had fallen over the years, the cost of transport kept increasing, making it expensive to conduct business in the region.
Touching on income inequality, she said, income inequality was high and addressing it could contribute to one per cent growth in GDP of the SSA.
Outlining short and medium term measures to address the challenges facing the region, Ms. Koliadina called on the region to address its macroeconomic imbalances, reduce inflation, investment infrastructure and human capital, improve productivity and control its debt.
The Deputy Minister of Finance, Mrs. Monah Quartey, in her remarks said the government had proposed measures in the 2016 budget to address the economic challenges facing the country.
“The continuation of fiscal consolidation measures agreed with the IMF, introduction of measures to improve the business climate, continued investments in critical infrastructure, especially in the energy sector, are all meant to stabilise the economy in the short term and also ensure rapid economic growth over the medium term,” she said.
Dr. Seth Adjei Baah, president of the Ghana Chamber of Commerce and Industry who spoke on the competitiveness of SSA expressed concern about the high cost of doing business in the SSA, saying it is making the region uncompetitive.
He called on the government in the SSA to initiate programmes to address the factors that hinder trade among countries in the region.
By Kingsley Asare