IMF Sees Sub-Saharan Africa Growth at 16-Year Low

NAIROBI, Kenya—sub-Saharan African economies will grow at the slowest pace in 16 years and lower than the global average this year, reversing a trend that saw the region elevated to one of the fastest-expanding global frontiers in previous years, the International Monetary Fund said Tuesday.

The region will grow on average by 3% in 2016, below the 3.2% global average, extending diminished growth of 3.4% in 2015, as several of the continent’s major economies struggle because of record low oil and mineral prices. The Fund dramatically slashed its 2016 forecast since its last report in October by 1.3 percentage points, as the slowdown in some of Africa’s major economies is taking a deeper toll than previously anticipated.

How Oil’s Tumble Continues to Hurt Nigeria

ByJosie Cox

The Naira is being hit but it’s not alone, with the currencies of other major oil economies including Norway and Russia feeling the pain.

Agence France-Presse/Getty Images

Here’s one oil economy that’s having a particularly rough ride.

Nigeria, which is dependent on oil and natural gas for 96% of export revenues and 80% of government revenues, has been slammed hard by a slump prices over the last weeks and on Thursday hit yet another all-time low against the dollar – a veritable kick in the teeth for the central bank after it just last week intervened by selling dollars and buying the Naira after the dollar soared above 172 naira.

The intervention initially triggered some respite, but today the dollar climbed above the previous peak, to above 173, traders said.

The Naira’s drop puts Nigeria among the worst hit of the word’s oil producers, but the ruble, Norwegian krone and Canadian dollar have all taken hits. It’s economy is also cited as one of the most promising growth stories in Africa, based in no small part on its massive oil reserves, but also its burgeoning middle class.