Monrovia - The World Bank is attributing rising conflicts as one key reason why West African Countries economies are declining even before the Ebola crisis. In a webcast held at World Bank Liberia Country Office - German Embassy compound in Congo Town World Bank Chief Economist Africa Region Francisco Ferreira and Lead Economist African Region Punam Chuhan-Pole deliberating on the latest report (Africa Purse team) update on Africa economic status blamed conflict for the slow growth in West African countries.
Entitle Africa’s Purse a twice – yearly World Bank analysis of the issues shaping Africa’s economic prospects was released at the start of the World Bank Group 2015 spring meetings, which will draw world’ finance and development ministers to Washington DC for talks on the state of the global economy and international development.
The report highlighted that West Africa growth should remain robust in a range of countries driven by infrastructures including (Cote D’Ivoire, Rwanda) and in Mining countries such as (Mozambique, Tanzania) investment and consumers spending.
Uganda, the report notes continued weakness in the prices of their main exports (metal and agricultural commodities) which it states will limit the benefits of the oil-prices decline. Sub Sahara Africa’s growth will slow in 2015 to 4.0 percent from 4.5 percent in 2014 according to World Bank projections released Monday. The downturn, largely reflects the fall in the prices of oil and other commodities, the report states.
The 2015 forecast is below the 4.4 percent average annual growth rate of the past two decades and well short of Africa’s peak growth rates of 6.4 percent in 2002-08. Excluding South Africa the average growth for the rest of sub- Saharan Africa is forecast to be around 4.7 percent.
“Despite strong headwinds and new challenges, sub Saharan Africa is still experiencing growth. And with challenges come opportunities” says Makhtar Diop, World Bank Vice president for Africa. The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty”.
In Guinea, Liberia and Sierra Leone, the Ebola crisis will continue to create a constraint for economic activity, although the danger has receded the risk of renewed spread of the disease will continue to exert downward pressure on economic growth in the short term.
The report furthered that the balance of risk to the outlook remains tilted to the downside and on the domestic front, a new generation of violent conflict poses security risks, in addition, the Ebola crisis remains a major concern for the most affected countries and for the sub region, and this epidemic serves to highlight the pre-existing weakness in the health systems of much of the continent and the potential for systemic risk from communicable disease. On the external front, a sharper –than expected slowdown in China, a further decline in oil prices and sudden deteriorations are the main risks.
The report states that the region’s economic outlook faces risk from deep running domestic fragilities. Among these, it named violent conflict, natural disasters and disease epidemics. These risks exacerbate policy challenges, especially in countries that are also struggling to adjust to the terms of the trade shock from falling commodity prices. After years of decline, conflict is on the rise again and according to the report, after years of decline in conflict and conflict related issues, it seems like conflict is also increasing once again.
The report continued that while the first decade of the first 21st century proceeded in relative peace in more years there has been an upsurge in violence compared with end of 1990s, it is especially the number of violent events that has increased (by more than a factor of 4 violent events against civilians) even though the number of casualties per event has declined to (to 4 as compared with 20 per violent event against civilians at the end of the 20th century).
The conventional and large-scale conflict and civil wars of the 1990s have receded in scale and intensity. Yet election-related violence, extremism and terrorist attacks, drug trafficking, west Africa has emerged as a key transit point in the trafficking of narcotics between Latin America and Europe and criminality have been on the rise. Additionally wars are increasingly being fought by armed insurgents on the periphery fought of factionalized and militarily weak states.
According to the World Bank, the re-emergence of conflict raises important concerns about whether Africa can sustain the progress of the last two decades, especially in the affected countries. The World Bank states that reducing conflict risk and promoting stability should be especially high on the agenda of policy makers as should be helping countries escape cycles of conflict and stability.
“In achieving that requires countering the drivers of fragility through by making investments in lagging regions reforming and improving the security sector, addressing land issues, creating greater openness regarding public matters an broadening the scope of governance in the extractive sector to incorporate issues such as political bargaining at the local level sub national dynamics and the negative local- level externalities that this sector can improve”, the report added.
The report also states that the Ebola epidemic has slowed significantly in 2015 but progress toward zero cases remains challenging with reversals in Guinea and Sierra Leone. It notes that the primary and secondary impacts of the Ebola epidemic continue to reverberate as of late March 2015 the cumulative number of cases neared 25,000 and deaths surpassed 10,000.
The economic impact of Ebola affected countries; the World Bank indicated has been massive, noting that in the second half of 2014, all three countries saw flat or negative income growth. “Forecast for 2015, with on-going investors aversion, sobering with contractions in Guinea and Sierra Leone, and projected growth in Liberia less than half what was predicted before the crisis” stated the report.