IMF downgrades sub-Saharan growth rates

Harare - The International Monetary Fund (IMF) has downgraded the 2016 economic growth rates in sub-Saharan Africa by 1.4 percentage points to 1.6%, its latest report has shown.

According to the July 2016 World Economic Outlook (WEO) released on Tuesday, the IMF said growth projections in sub-Saharan Africa were revised down substantially, reflecting challenging macroeconomic conditions in its largest economies, which are adjusting to lower commodity revenues.

Nigeria was the worst affected with earlier projections now being downgraded by 4.1 percentage points to a negative growth rate of 1.8% in 2016.

“In Nigeria, economic activity is now projected to contract in 2016, as the economy adjusts to foreign currency shortages as a result of lower oil receipts, low power generation, and weak investor confidence,” said the IMF.

“These revisions for the largest low-income country are the main reason for the downgrade in growth prospects for the low-income developing countries group.”

The IMF said drought will also be of concern to growth rates in sub-Saharan Africa.

“Other ongoing concerns include climate-related factors such as the drought in East and Southern Africa,” said the IMF.

Meanwhile, in South Africa, the IMF has projected GDP to remain flat in 2016, with only a modest recovery next year.