Sub-Saharan Africa (SSA) grew at its second slowest pace since 2000 last year and, though we expect a modest acceleration this year, growth is likely to remain below the rates seen over the past decade. With global monetary conditions set to tighten over the coming years, investors are now paying closer attention to the region’s vulnerabilities. This has cast a spotlight on economies running large budget and current account deficits, such as Ghana, South Africa and Zambia. Meanwhile, political concerns are mounting in some parts of the region, notably Nigeria. Some countries may now be required to tighten policy in line with rising global interest rates, leading to a period of softer growth. However, not all countries are likely to be affected. Indeed, we expect a pick up in growth in Kenya and a number of export-dependent economies in the south. And at the aggregate level, SSA should still remain one of the world’s best performers in 2014-2015.
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