Africa

The momentum of sub-Saharan Africa’s economic pick-up that started in 2017 carried over into 2018, reflected in real growth accelerating by an estimated 3.1% from 2.7% the year before.

Stronger growth was underpinned by domestic policy adjustments and a positive external environment that included continued steady growth in many large developed economies, higher commodity prices, and beneficial external financing conditions. 

Inflation was generally comfortable, which helped support prudent monetary policy implementation (reasonably stable interest rates in many countries helped contain some exchange rate pressures and fiscal imbalances). In turn, this helped current account deficits to narrow to more comfortable levels. 

However, foreign exchange reserves remained low, public debt stocks remained high, and the lingering economic malaise of previous years undermined the banking sector.

Moreover, based on current policies, the aggregate real economic growth rate remained too low to create the number of jobs needed to absorb anticipated new entrants into labor markets. This sustained already very low income per capita across the continent.

Africa’s steady economic growth and positive socioeconomic indicators continued to improve last year. However, these are yet to translate into benefits and opportunities for Africans and are reflected in human development remaining at the lowest average level compared to other regions in the world.

The vast majority of African countries remains in the UNDP’s Low Human Development group. Persistent inequality, poverty and inequity in access to social services and economic opportunities, particularly for youth, the aged, persons with disabilities and women, are creating deficits in human development, and slowing progress toward achieving development and democracy goals.

Despite this discouraging backdrop, Africa’s transformation varies between countries and the outlook for meeting the Sustainable Development Goals (SDGs) is improving. Recent strong growth has underpinned an expansion of social investments, which in turn has led to improvements in livelihoods, reflected in rising universal primary education, falling under-five mortality rates, a reduction in adolescent birth rates and expansion of female labor participation.