The International Monetary Fund (IMF), one of the foremost surveyors of economies around the world, has revised its 2018 economic growth forecasts and West African darling, Ghana, has lost Africa’s top spot to East African giant, Ethiopia.
Ethiopia has held the title for most of the last decade.
Ghana, West Africa’s second-biggest economy, is now expected to grow 6.3 percent this year, as opposed to the 8.9 percent predicted in October 2017. Ghana’s new forecast is also lower than the 7.4 percent growth now projected for Ivory Coast and 8.5 percent growth expected for Ethiopia.
Ghana’s $43 billion economy relies on commodities, including oil, gold, and cocoa, and expanded 8.5 percent last year as it’s Sankofa crude field opened in May. It became an oil producer in 2010 and its growth booms and busts have been closely linked to oil since.
Ethiopia’s economy is almost twice as big as Ghana’s and is concentrated heavily in services and agriculture. In 2000, the second-most populous country in Africa, was the third-poorest country in the world. Today, the country draws in investors including General Electric Co., Johannesburg-based Standard Bank Group and hundreds of Chinese companies.
The IMF also revised its forecast for the region, pinning sub-Saharan Africa’s growth rate to 3.4 percent this year and 3.7 percent the next “as the challenging outlook in commodity exporters gradually improves,” it said.
Nigeria and South Africa are the continent’s biggest economies accounting for almost half of the region’s GDP. Nigeria, the continent’s most-populous nation and top crude producer, will grow 2.1 percent, unchanged from the IMF projection released in January. South Africa, the world’s biggest source of platinum, will expand 1.5 percent. It’s growth rate for 2018 was pinned at 0.9 percent in January.
Forecasts from the World Bank and African Development Bank in January also hoisted Ghana as the continent’s fastest growing economy. The World Bank will publish an updated report on African economies today.