The International Monetary Fund cut its 2015 economic growth forecast for sub-Saharan Africa by almost 1 percentage point as falling oil prices curb output in the region’s biggest economy.
The growth outlook in Nigeria, the continent’s largest oil producer, was lowered to 4.8 percent from 7.3 percent estimated in October, the IMF said in its World Economic Outlook update released Tuesday in Beijing. Sub-Saharan Africa’s economy is forecast by the IMF to expand 4.9 percent this year, down from a previous projection of 5.8 percent, and grow 5.2 percent in 2016.
Oil prices have plunged by more than half since June, curbing revenue and investment plans in Nigeria and Angola, both of which rely on crude proceeds for about 75 percent of government revenue. Nigeria’s currency has slumped 14 percent against the dollar in the past six months to a record low of 188.53 by 5:53 a.m. on Tuesday in Lagos, the commercial capital, as foreign-currency reserves slump.
“Oil exporters, for which oil receipts typically contribute a sizable share of fiscal revenues, are experiencing larger shocks in proportion to their economies,” the IMF said in a statement.
Lower crude prices risk undermining economic growth in Nigeria and are weighing on the country’s credit rating, Matt Robinson, manager of the Africa sovereign ratings team at Moody’s Investors Service, said on Jan. 15.
The IMF cut South Africa’s growth forecast for this year to 2.1 percent from 2.3 percent as falling commodity prices offset the benefit from lower oil-import costs. The economy is set to expand 2.5 percent in 2016, down from an earlier estimate of 2.8 percent.