By Franklin Alli

The Africa Development Bank, AfDB, yesterday , revised downward its projected GDP growth rate for the continent  to 3.7 percent from 4.2 percent by 2018.

The bank in an updated forecast released in Abidjan, said: “The changes in previous forecasts released in the African Economic Outlook in May 2017 have followed the release of new data by some key countries –Nigeria, Algeria, and Egypt– which account for some 50% of the continent’s GDP and which revised their 2017 and 2018 forecasts downwards.”

Abebe Shimeles, Acting Director, Macroeconomics Policy, Forecasting and Research, said  that however, the continent’s averages compare favourably with global economic growth projections of 3.5% and 3.6% GDP growth in 2017 and 2018, respectively.

“Africa’s economic outlook improved in 2017 compared with 2016 and is expected to gain momentum in 2018. GDP growth in 2017 is expected at 3.0% up from 2.2 in 2016 and projected to expand to 3.7% in 2018,” he said.

According to him, the new set of data attributes Africa’s economic rebound mainly to:

“Recovery in the global economy and bottoming out of the commodity price bust that had set in since 2014.

“Economic diversification and drive for structural transformation need to proceed with urgency and intensity in order to avoid the repeat of boom-bust cycle in the wake of commodity price volatilities.”

The report further noted: “Steady Domestic demand and public investments in infrastructure also helped sustain growth in many countries, adding that beyond accumulation of physical capital, productivity of those investments is important for sustainable growth and must remain an area of policy focus.

“Fiscal and current account deficits are expected to narrow due to strong export performance and higher government revenues but African governments must resist the temptation to “catch-up” on the spending that was suspended in the last two years as this will exuberate deficits.”

In regional terms,  it said : “In West Africa, the economic recession in Nigeria completely offset the strong gains made in Sierra Leone, Togo, Cote d’Ivoire and Senegal, the latter two being the region’s fastest growing economies.  Nigeria accounts for 72.4% of the region’s overall GDP but contracted by -1.5% in 2016 against an average expansion of 6% for the other four economies, which collectively account for about 10% of regional GDP.

“West Africa is expected to record improvements in growth to 2.5% and 4% in 2017 and 2018 respectively mainly attributed to improvements in oil production in Nigeria and rising global commodity prices.

Central Africa on the other hand was mainly slowed down by poor performance in Equatorial Guinea and Chad which contracted by -7.3% and -6.4%, respectively followed by Republic of Congo which shrunk by  -2.4%. Central Africa republic is expected to record improvements in growth in 2017 and 2018 of 1.6% and 3.1% in the two respective years, the report says.