The International Monetary Fund reduced its growth forecast in sub-Saharan Africa because of the outbreak of the Ebola virus in West Africa and violence in at least five other countries.
Africa’s economy will expand 5 percent this year, about the same as in 2013, driven by infrastructure investment, a buoyant services sector and strong agriculture production, the IMF said today in an e-mailed statement. In April, the Washington-based fund forecast a 5.5 percent growth rate this year.
While low-income countries will spur expansion with growth of as much as 7 percent in 2014-2015, Antoinette Sayeh, director of the IMF’s Africa Department, said in a statement. Ebola has killed more than 4,500 people in Guinea, Liberia and Sierra Leone since the outbreak of the virus in December.
“The Ebola outbreak could have much larger regional spillovers, especially if it is more protracted or spreads to other countries, with trade, tourism, and investment confidence severely affected,” according to the IMF. “In Ebola-affected countries, fiscal accounts are likely to deteriorate, and, where public debt is manageable, fiscal deficits should be allowed to widen temporarily.”
Worsening insecurity stemming from civil wars and Islamist militant attacks could also curb Africa’s economic growth, according to the IMF.
Security ‘Difficult’
“The security situation continues to be difficult in Central African Republic and South Sudan, and remains precarious in northern Mali, northern Nigeria, and the coast of Kenya,” it said.
Domestic economic challenges may also curb growth in countries such as South Africa that are facing electricity shortages and labor disputes, according to the IMF.
In Ghana and Zambia, “large macroeconomic imbalances have led to pressures on the exchange rate and inflation,” it said.
Senegal became the first country to be declared free of Ebola during the worst-ever outbreak of the virus after no new cases were reported in at least 42 days, the World Health Organization said Oct. 17. Nigeria, which recorded 19 cases and seven deaths, will probably be declared Ebola-free today, according to the WHO.