By Isaac Ndou
JOHANNESBURG: The International Monetary Fund (IMF) has said in a report that South Africa and Nigeria are hampering growth in Sub-Saharan Africa.
The funding body believes that political uncertainty in the two big countries with the largest economies in Sub-Saharan Africa is the reason investment in them has deteriorated in recent times.
“Nigeria and SA, the two largest economies in sub-Saharan Africa and its main economic engines, have been stuck in low gear and we are weighing heavily on the region’s overall growth,” said an IMF report.
The IMF on the other hand believes both South Africa and Nigeria’s economies can get a boost in confidence if policy reforms advances faster than what is anticipated with growth in the region is estimated to increase from 2.8% in 2017 to 3.5% in 2018.
“Higher debt levels have translated into a sharp increase in debt service, diverting resources from much needed spending in areas such as health, education and infrastructure,” explained Abebe Aemro Selassie who is IMF’s African department director.
The body further revealed that fiscal deficits have continued to widen in South Africa. The South African Revenue Service announced earlier in the year that they had came slightly below the Treasury’s targeted revenue for 2017-18, saying it was due to low tax compliance levels and lack of growth.