Despite the slowdown, the sub-Saharan economy was still one of the fastest growing regions in the world – second only to emerging and developing Asia, the IMF said.
But it added: ‘For the eight oil exporters, [lower prices] will pose a formidable challenge and, with limited buffers, will require them to undertake significant fiscal adjustment.’
Lower oil prices is expected to drive the region’s eight oil exporters – Nigeria, Angola, Chad, Cameroon, Congo Republic, Equatorial Guinea, Gabon and South Sudan – to implement significant policy adjustments.
The report said beyond the current oil shock in the last six months, sustaining strong, diversified, and robust growth remained the key policy priority.
In Nigeria, for example, the region’s largest economy and oil exporter, the authorities have been cutting capital spending and have adjusted monetary and exchange rate policies to ease pressures on the public finances and the currency.
The fund said growth in 2015/16 in Nigeria is expected to average 5%, nearly 2.5 percentage points below expectations in October 2014.
In Angola, the region’s second largest oil producing country, growth in 2015/16 is expected to be 4.25% on average.
According to the report, ‘oil exporters are facing a challenging environment, and their growth in 2015/16 is expected to average 4.75%, substantially marked down from 7% expected in October 2014’.
Furthermore, 2015 will be another difficult year for the three main Ebola-stricken countries – Guinea, Liberia and Sierra Leone – as economic activity is expected to be ‘significantly depressed’.
Antoinette Sayeh, director of the IMF’s African Department, said: ‘The IMF has provided $390m of assistance to help these countries, including $100m of grants for debt relief.’
Speaking more widely about the region, Sayeh added: ‘While the baseline scenario is for solid growth, policy makers need to remain mindful of risks that could still cloud the outlook.
‘The current circumstances also highlight the urgent need for policies that favour structural transformation to diversify the sub-Saharan production base and promote greater integration into global trading networks.’
This will help the region create jobs for the rapidly growing young population, she said.
‘If properly tapped, it could create a powerful engine for long-term growth.’
