The growth forecast for Sub-Saharan Africa has been cut by The World Bank, after the international financial institution backtracked from its previous growth projection for the African continent.
The World Bank had initially announced a growth forecast of 3.3 percent for Sub-Saharan Africa in 2019. But on Monday, the forecast was retracted, with The World Bank stating that its growth projection for Africa is now 2.8 percent.
Also, the bank cut its 2018 growth estimate for the regional economy to 2.3 per cent from last October’s predicted 2.7 percent growth.
Why the growth cut: The international financial institution said a decline in industrial production and a trade dispute between China and the United States of America will take a toll on Africa’s economic growth.
Also, a decade of rapid growth for the region was cut short by the commodity price slump of 2015.
Why it matters: The new projection means the economic growth will fail to keep up with population growth. This will make it the fourth year in a row that such will be recorded after slipping to below 3 percent in 2015.
“The slower-than-expected overall growth reflects ongoing global uncertainty, but increasingly comes from domestic macroeconomic instability including poorly managed debt, inflation and deficits.” -TWB
Focus on Three of Africa’s largest economy
About 60 percent of sub-Saharan Africa’s annual economic output is from Nigeria, South Africa and Angola. But their contribution to the growth momentum has been hampered by various challenges. According to The World Bank:
“This downward revision reflects slower growth in Nigeria and Angola, due to challenges in the oil sector, and subdued investment growth in South Africa, due to low business confidence.”
However, due to a modest pick-up in the non-oil sector, The World Bank reported that Nigeria’s economy grew from 0.8 percent in 2017, to an estimated 1.9 percent in 2018.
For South Africa, policy uncertainty in the country has left investors wary despite coming out of recession in the third quarter of last year. But Angola remains in recession due to weak oil production.
Meanwhile, countries like Zambia and Liberia have found it difficult to lure investors considering their High inflation and heavy debt loads, and this has affected their growth prospects.
But for the likes of Rwanda, Uganda, Kenya, Benin, and Ivory Coast whose economies do not depend on commodities, growth remains strong.
World Bank is worried by the rate of debt in Africa
The World Bank says countries are being exposed to vulnerabilities because of the region’s debt rate and the type of borrowing that countries are undertaking.
“External debt is shifting from traditional, concessional, publicly guaranteed sources to more private, market-based, and expensive sources of finance, putting countries at risk.
“By the end of 2018, nearly half of the countries in sub-Saharan Africa covered under the Low-Income Country Debt Sustainability Framework were at high risk of debt distress or in debt distress, more than double the number in 2013.”
World proffers solution to fast-track growth
The World Bank has urged African countries to adopt the use of information technology more effectively in its operations. According to Albert Zeufack, the chief economist for Africa at the bank, this could help boost annual growth by nearly two percent. He said it will be a game-changer for Africa.
Senate calls for the liberalization of cement policy to crash the price of the commodity
The Senate also tasked the FG on providing more industrial incentives to bring new players into the cement industry.
The Nigerian Senate has called for the liberalization of Nigeria’s cement policy to boost production and subsequently crash the price of the commodity in the country.
This motion was raised by Senator Lola Ashiru at today’s senate plenary, the senator also tasked the Federal Government on providing more industrial incentives to bring new players into the cement industry, in addition to the liberalization of the cement policy in Nigeria.
Ashiru explained that to reduce the price of cement and in extension, other building materials in the country, the Federal Government needs to provide an enabling operating environment that will encourage new entrants in the country.
The Senate in conclusion called on the FG to provide more industrial incentives and protections such as concessionary loans and larger tax incentives to encourage new entrants and expand the national cement production infrastructure, as this boost in production will lead to a downward review of cement price in Nigeria.
What industry leaders are saying
Earlier this year the founder of BUA Group, Abdulsamad Rabiu, called for the liberalization of Nigeria’s cement policy to boost production and reduce the price of the commodity.
The billionaire philanthropist faulted the belief that Nigeria is self-sufficient in terms of cement production, noting that recent statistics and figures on Nigeria’s population and cement production do not support this status of sufficiency in cement production as stated by some individuals.
He attributed the high price of cement products in the country to the supply gap which exists in the country, as the few producers who currently operate in the country are unable able to meet the country’s huge and growing demand.
The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin, explained that the demand and consumption of cement in the nation currently outstrips supply, and this can be pegged on the growth in the country’s population, and the strong appetite for real estate investment and construction in the country.
He revealed that a supply gap of about 40% exists in the country’s cement market and that all players in the industry are working hard to level production with the rising demand in the country.
Paypal’s Venmo now permits cryptocurrency trading
Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
Venmo, a mobile payment service owned by PayPal has announced that it has started allowing users to buy, hold and sell cryptocurrencies on its app. Just like PayPal, Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, and users can carry out transactions with as little as $1 on the app
Founded in 2009, Venmo has over 70 million users and it is one of the most popular payment channels in the US. The payment platform processed around $159 billion in payments last year.
Since the app functions like a social network, adding cryptocurrency will offer a more user-friendly feel for people who love buying and selling crypto.
As bigger companies show more interest in cryptocurrency, there will be wider adoption of virtual currencies in future. Venmo is the latest payment app that is offering support for cryptocurrency on its platform.
Paypal, the parent company of Venmo is one of the most active companies in the crypto space as it allows users to buy, sell and hold cryptocurrencies in their digital wallets. Paypal users can also spend their coins at millions of merchants globally.
Crypto on Venmo is enabled through PayPal’s partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.
What they are saying
Darrell Esch, Venmo’s Senior Vice President and general manager said “Our goal is to provide our customers with an easy-to-use platform that simplifies the process of buying and selling cryptocurrencies and demystifies some of the common questions and misconceptions that consumers may have.”
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