Sub-Saharan Africa’s growth will slow in 2015 to 3.7% from 4.6% in 2014, reaching the lowest growth rate since 2009, according to new World Bank projections.

The 2015 forecast remains below the robust 6.5% growth in GDP which the region sustained in 2003-2008, and drags below the 4.5% growth following the global financial crisis in 2009-2014.

Overall, growth in the region is projected to pick up to 4.4% in 2016, and further strengthen to 4.8% in 2017.

SSA countries are continuing to grow, albeit at a slower pace, due to a more challenging economic environment, the World Bank said in its latest Africa’s Pulse, the twice-yearly analysis of economic trends and the latest data on the continent.

Sharp drops in the price of oil and other commodities have brought on the recent weakness in growth.

Other external factors such as China’s economic slowdown and tightening global financial conditions weigh on Africa’s economic performance, according to Africa’s Pulse.

Compounding these factors, bottlenecks in supplying electricity in many African countries hampered economic growth in 2015.

Makhtar Diop, World Bank Vice President for Africa, said: “The end of the commodity super-cycle poses an opportunity for African countries to reinvigorate their reform efforts and thereby transform their economies and diversify sources of growth.”

“Implementing the right policies to boost agricultural productivity, and reduce electricity costs while expanding access, will improve competitiveness and support the growth of light manufacturing,” he said.

According to Africa’s Pulse, several countries are continuing to post robust growth.

Cote d’Ivoire, Ethiopia, Mozambique, Rwanda and Tanzania are expected to sustain growth at around 7% or more per year in 2015-17, spurred by investments in energy and transport, consumer spending and investment in the natural resources sector.

Overall, decline in growth in the region is nuanced and the factors hampering growth vary among countries, according to Africa’s Pulse .

In the region’s commodity exporters—especially oil-producers such as Angola, Republic of Congo, Equatorial Guinea, and Nigeria, as well as producers of minerals and metals such as Botswana and Mauritania, the drop in prices is negatively affecting growth.

In Ghana, South Africa, and Zambia, domestic factors such as electricity supply constraints are further stemming growth.

In Burundi and South Sudan threats from political instability and social tensions are taking an economic and social toll.

Fiscal deficits across the region are now larger than they were at the onset of the global financial crisis, the report said.

Rising wage bills and lower revenues, especially among oil-producers, led to a widening of fiscal deficits.
In some countries, the deficit was driven by large infrastructure expenditures.

Reflecting the widening fiscal deficits in the region, government debt continued to rise in many countries.
While debt-to-GDP ratios appear to be manageable in most countries, a few countries are seeing a worrisome jump in this ratio.

Punam Chuhan-Pole, Acting Chief Economist, World Bank Africa and the report’s author, said: “The dramatic, ongoing drop in commodity prices has put pressure on rising fiscal deficits, adding to the challenge in countries with depleted policy buffers.”

Growth in Sub-Saharan Africa will be repeatedly tested as new shocks occur in the global economic environment, underscoring the need for governments to embark on structural reforms to alleviate domestic impediments to growth.

“To withstand new shocks, governments in the region should improve the efficiency of public expenditures, such as prioritizing key investments, and strengthen tax administration to create fiscal space in their budgets,” said Chuhan-Pole.