In
its latest sub-Saharan Africa (SSA) Credit Overview released December 16, 2014,
Fitch Ratings says that it expects average GDP growth of 5 percent in 2015, for
the 18 countries rated by the agency, up from 4.5 percent in 2014.
Growth
will not be evenly spread across the region but should be resilient to lower
oil prices.
Countries’
ability to grow will be impacted by their degree of commodity dependence,
exposure to China, domestic challenges and capacity to invest.
Growth
in Nigeria, Sub-Saharan Africa’s largest economy, has been revised down from
6.4 percent to 5.2 percent for 2015, as a result of lower oil prices and
tighter policy.
This
will be offset by an uptick in South Africa’s growth, although challenges in
the electricity sector may see growth underperform.
Oil
importers and countries with the fiscal space to invest will continue to grow
robustly.
Inflation
is expected to moderate across the region due to lower oil and agricultural
prices. Public finances will remain expansionary, with the average budget deficit
rising to 4.9 percent of GDP in 2015, from 3.9 percent in 2014 and 0.8 percent
in 2011.
Over
the same period, the average current account will swing from surplus into
deficit.
Lower
oil prices will dampen growth in Angola, Nigeria and Gabon, which will also see
external and fiscal balances worsen.
However,
most SSA countries are significant oil importers – oil makes up around 20
percent of the import bill in Kenya, Cote d’ Ivoire, Seychelles and Ethiopia –
and will therefore be beneficiaries of lower prices.
Foreign
investment and export performance could be undermined in Zambia and Mozambique,
due to lower commodity prices and close trade ties with China.
Home-grown
challenges will hamper growth and could weigh on ratings over the coming year
in Ghana and South Africa. Growth in South Africa will be held back by
challenging labour relations, electricity shortages and weak private sector
investment.
Businessday
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