World Bank advises African economies to strengthen the efficiency in selection and monitoring of public infrastructure projects.
Economies within Sub-Saharan African Africa will require to not only undertake public investment in infrastructure but strengthen their project selection and monitoring capacities if they are to realize a stronger recovery in economic growth in 2017.
This is according to the Africa’s Pulse, a bi-annual analysis conducted by World Bank on African economies.
The report which was released on Wednesday forecasts that the Sub Saharan Africa region is set to grow by a meagre 2.6% in 2017, not enough to boost employment and reduce the high levels of poverty.
The region experienced the worst economic decline in more than two decades in 2016, largely due to a long drought.
Economic analysts at the World Bank say countries still need to address the wastefulness in public spending, invest wisely while keeping an eye on their debt levels lest returns on public investment could be negatively affected.
“There’s need for fiscal discipline and structural reforms. Equally, borrowing must be managed so that interest rates are properly managed,” said Punam Chuhan-Pole, the World Bank Lead Economist who authored the report.
She stated that with the poverty rates still high, growth needs to be inclusive as well as tackle the slowdown in investment and high trade logistics all of which hamper competitiveness.
The report says oil exporting countries in the Central African Economic and Monetary Community (CEMAC) continue to face economic difficulties.
“The latest data reveal that seven countries (Côte d’Ivoire, Ethiopia, Kenya, Mali, Rwanda, Senegal, and Tanzania) continue to exhibit economic resilience, supported by domestic demand, posting annual growth rates above 5.4% in 2015-2017,” the report revealed.
Dr. Albert Zeufack, World Bank’s Chief Economist for the Africa Region said; “As countries move towards fiscal adjustment, we need to protect the right conditions for investment so that Sub-Saharan African countries achieve a more robust recovery.”
“We need to implement reforms that increase the productivity of African workers and create a stable macroeconomic environment. Better and more productive jobs are instrumental to tackling poverty on the continent,” he added.
Many African countries continue to grapple with graft which often impedes smooth implementation of infrastructure projects.
Zeufack notes that in order for these economies to achieve significant growth, procurement in these projects needs to be transparent and competitive. This, he said, will spur private sector investment especially in sectors of manufacturing and services.
According to the report, however, external risks will be imminent, among them; stronger-than-expected tightening of global financing conditions, weaker improvements in commodity prices, and a rise in protectionist sentiment.
Domestically, innadequate reforms, rising security threats, and political volatility ahead of elections in some countries pose a threat to the current recovery.
In February, World Bank in its economic update on the state of Uganda’s economy predicted that given its current average growth of 4 to 5% the country might fail to attain middle income status come 2020. The minimum growth rate for any country to get into lower middle income status is 10%.
At the time, World Bank had attributed Uganda’s sluggish growth to the low commodity and fuel prices in international markets, the crisis in South Sudan, and severe drought have continued to strain investment and exports.
Last week, Bank of Uganda said the earlier forecast 4.5% GDP growth for the 2016/2017 financial year might not be achieved due to weak economic performance in the first two quarters. The Central Bank attributes this to the climatic conditions.
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