BofA: Near-term growth weakening in SSA countries, except Kenya

Bank of America Global Research has released a report indicating a shift in near-term growth performance in Sub-Saharan African countries, with Kenya emerging as an exception. The report revised down growth forecasts for Ghana and Nigeria, citing common weaknesses in industrial production. Tatonga Rusike, Sub-Saharan Economist at Bank of America Global Research, provided insights into the analysis during an exclusive interview with CNBC Africa. Rusike delved into the rationale behind the revised growth projections for Sub-Saharan African countries, particularly Nigeria and Ghana. He highlighted the impact of industrial production weaknesses on the economic outlook, leading to the downward adjustments. The focus on industrial production in these countries has raised concerns about the overall growth trajectory. When discussing Nigeria's efforts to combat oil theft and improve production levels, Rusike expressed optimism about the country's potential for growth. He emphasized the importance of reducing pipeline vandalism and increasing oil production to boost economic performance. Despite challenges, he noted that Nigeria's outlook for next year could be positive if production levels increase as projected. Shifting the focus to Ghana, Rusike acknowledged the IMF program in place to enhance macro stability and currency strength. He highlighted the positive impact of fiscal consolidation and inflation control measures on Ghana's economic landscape. With a successful IMF review on the horizon, Ghana could receive additional financial support, leading to further improvements in FX reserves and currency performance. In contrast, Kenya stood out for its proactive policy priorities and fiscal consolidation efforts under the current government. Rusike commended Kenya's progress in reducing fiscal deficits and securing international financial support from institutions like the IMF and the World Bank. Despite concerns about a looming Eurobond maturity in 2024, Kenya's adherence to program targets and stability measures have garnered investor confidence. However, the broader challenges facing sub-Saharan Africa, such as elevated inflation levels, weak monetary policy transmission, and high debt burdens, remain areas of concern. Rusike highlighted the impact of these factors on the region's growth outlook, particularly in countries like Ghana and Nigeria. The G20 framework for debt treatment offers a potential solution, but discussions with countries like Zambia and Ghana are facing delays. In conclusion, Rusike expressed cautious optimism about the region's economic prospects, noting that while challenges persist, there is resilience and potential for growth with the right policy interventions. The focus on addressing inflation, debt burdens, and improving industrial production could pave the way for a more robust economic recovery in Sub-Saharan Africa.