(The Source) – Zimbabwe is among the 10 sub-Saharan Africa
economies which have deteriorated significantly despite a positive outlook for
the region, the International Monetary Fund (IMF) said on Monday.
The southern African country is expected to grow by 2,8
percent this year before slowing to 0,8 percent in 2018, according to the IMF,
as its reform programme stalls due to political, and governance challenges.
With borrowings of $13 billion, 70 percent of GDP, Zimbabwe
is among countries in the region with highest levels of debt. The country
undertook an IMF staff monitored programme between 2013 and 2015 but failed to
implement key reforms, notably of its civil service, which gobbles 80 percent
of its budget.
“In particular, the economic outlook for Burundi, Eritrea,
São Tomé and Príncipe, Togo, and Zimbabwe is complicated by high levels of
public debt, while climate change risks are also important for Burundi,
Eritrea, Madagascar, and Malawi,” the IMF said in a report launched in Harare.
Zimbabwe, along with Burundi, Chad, the Democratic Republic
of the Congo, the Republic of Congo, Eritrea, The Gambia, Liberia, Sierra
Leone, South Sudan, experienced a rather marked deterioration in their economic
performance, IMF said.
The sub-Saharan economy is expected to grow 3,4 percent in
2018 up from 2,6 percent in this year. The region’s growth slowed sharply in
2016, averaging 1.4 percent, the lowest in two decades as about two-thirds of
the countries in the region which account for 83 percent of the region’s GDP,
slowed down. Sub-Saharan population growth averaged 2.7 percent, according to a
2015 World Bank estimate.
Presenting the IMF’s latest economic outlook report on
Monday in Harare, director of the IMF’s African Department Abebe Selassie said
the broad based slowdown in the region was easing but the underlying situation
remains difficult.
“We seeing a pickup in activity to 2,6 percent this year
which is encouraging. Notwithstanding this recovery we are still going to have
a situation where 12 out of the 45 countries will not be enjoying increased per
capita income this is about 40 percent of the population in the region,” he
said.
“Beyond this year to 2018 we see growth accelerating to
around 3,5 percent which is good news but short of the 5 percent which the
region was enjoying in 2013.A lot of work needs to be done to put in place
policies to get growth to 5-6 percent which we need to make a significant dent
on poverty going forward.”
Selassie warned that increasing levels of public debt were
amplifying the strain on the financial sector.
“The maiden level of public sector debt in sub-Saharan
Africa rose from about 34 percent of GDP in 2013 to 48 percent in 2016, and is
expected to exceed 50 percent in 2017….This was driven by slow growth, a slump
in commodity prices, widening fiscal deficits and in some cases sharp exchange
rate depreciations.”
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