NAIROBI (Reuters) – Economic growth in sub-Saharan Africa is seen rising between this year and 2019, helped by better commodity prices and improved global conditions, the World Bank said in a report on Wednesday.

The bank said in its latest “Africa’s Pulse” report economic growth was seen expanding to 2.6 percent this year and further to 3.2 percent in 2018 and 3.5 percent a year later.

Sub-Saharan African growth was an estimated 1.3 percent in 2016, the World Bank said.

“The upturn in economic activity is expected to continue in 2018-19, reflecting improvements in commodity prices, a pickup in global growth, and more supportive domestic conditions,” the bank said in its report.

The bank said the 2016 growth was the worst for the region in more than two decades, hurt by poor performance in Nigeria, South Africa and Angola.

“This low growth rate was driven mainly by unfavourable

external developments, with commodity prices remaining low, and difficult domestic conditions,” the report said.

It said growth in Nigeria contracted by 1.5 percent, due to tight liquidity, delays in implementing its budget, and militant attacks on oil pipelines.

The bank said Angola’s growth slowed due to a fall in oil production while South Africa’s economic expansion slowed to 0.3 percent due to contractions in the mining and manufacturing industries and the effects of drought on agriculture.

“Excluding these three countries, growth in the region was estimated to be 4.1 percent in 2016,” the report said.

(Reporting by George Obulutsa; editing by John Stonestreet and Pritha Sarkar)

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TUNIS (Reuters) – Tunisia’s central bank will reduce its interventions so the value of the dinar steadily declines, but it will prevent a dramatic slide in the currency, the finance minister said on Tuesday.

The strategy is part of Tunisia’s talks on reforms with the International Monetary Fund. The IMF is pushing Tunisia to overhaul its finances and reduce public spending, especially public-sector wages, where spending is among the highest in the world compared with gross domestic product.

Part of those negotiations have been finding ways to encourage exports and reduce reliance on imports, a strategy which would benefit from a weaker dinar.

“The central bank is going to minimise its interventions to reduce the value of the dinar in a gradual slide of the dinar,” Finance Minister Lamia Zribi told local Express FM Radio. “But we will avoid a brutal devaluation like that in Egypt.”

The dinar reached 2.5 dinars to the euro on Monday.

Egypt floated its currency, the pound, last year, letting it fall by 32.3 percent.

The IMF on Monday agreed to release a delayed $320 million tranche of Tunisia’s $2.8 billion in loans. It had been held up by concerns over Tunisia’s lack of progress in its reforms.

The agreement to release the funds came after talks in Tunis that included setting priorities for progress in the reforms. Those include increasing tax revenue, reducing the public wage bill through civil-service reforms and reducing energy subsidies, according to an IMF statement.

The IMF also called for tighter monetary policy that would counteract inflationary pressures, and said “greater exchange rate flexibility would help narrow the large trade deficit.”

The finance minister said the reforms on public works may include early retirement, reforms to loss-making public companies and social funds.

“For our part we are willing to advance the reforms and avoid the painful reforms such as lifting subsidies completely,” she said.

Tunisia has been held up by as an example of a democratic transition since the overthrow of former President Zine El-Abidine Ben Ali in 2011. It has enacted a new constitution, held free elections and adopted compromise-style politics to overcome tensions between secular and Islamist leaders.

But economic reforms have lagged and many people are concerned about the cost of living, unemployment and rural marginalisation, especially in southern and central regions that were the heartland of the 2011 uprising.

($1 = 2.3148 Tunisian dinars)

(Reporting by Tarek Amara; Writing by Patrick Markey)

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RABAT (Reuters) – Morocco plans to start the first stage of liberalising its dirham currency in the second quarter of this year, though the process to full flexibility may take 15 years, the central bank governor said on Tuesday.

“We will begin the first phase of liberalising the dirham in the second quarter,” Governor Abdellatif Jouahri told Reuters at an Arab finance ministers meeting in Rabat. “I can’t tell how long the duration of each phase will take, it depends on the market.”

(Reporting by Samia Errazzouki; writing by Patrick Markey)

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By Tarek Amara

TUNIS (Reuters) – Tunisia’s economy will start to regain momentum this year after six years of slow growth, driven by the revival of the vital tourism industry and the return to state phosphate production, Prime Minister Youssef Chahed said.

Chahed was speaking in an interview with state television late on Sunday, addressing concerns about the economy after hundreds of youths protested over the last week in some towns, demanding development and employment.

Tunisia has been praised as an example of democratic transition since the overthrow of former President Zine El-Abidine Ben Ali in 2011. But many people are concerned about the cost of living, unemployment and the marginalisation of rural towns – factors that fueled the uprising that sparked the Arab Spring revolts.

“The tourism sector is better now and will grow by 30 percent this year. Phosphate production returned to old levels and we expect a good agricultural season,” Chahed said.

He said that tax revenues rose by 14 percent in the first quarter of this year.

The prime minister said that this upward trend was still fragile and threatened by the inflammatory discourse of some politicians and by random strikes and protests that have hurt investor interest in the country.

Tunisia expects economic growth to rise to 2.5 percent in 2017 after failing to exceed 1 percent for the last six years.

The government is under pressure from international lenders to reduce public spending and cut its deficit as part of economic and financial reforms that have been delayed for years by political infighting and inertia.

A delegation from the International Monetary Fund last week arrived in Tunisia for talks on accelerating the North African country’s economic reforms, after postponing the payment of a second tranche of aid worth $350 million, out of a $2.8 billion loan programme.

The IMF put back the payment scheduled last December citing a lack of progress in overhauling the public sector wage bill, public finances and state banks among other issues.

Chahed said talks with the multinational lender “look positive and I am optimistic after negotiations” because reforms were progressing according to a specific timetable in the public sector and social funds.

“We are in good shape for these reforms and we are the first government that has the courage to start these delicate reforms that have been stalled for years,” he said, without giving details.

Tunisia is expected to sell stakes in three state-owned banks and cut up to 10,000 public sector jobs.

Chahed said parliament will discuss this month “an economic emergency” bill that will allow the government to bypass bureaucratic hurdles and speed up large-scale projects as it seeks to boost growth and create jobs.

(Editing by Patrick Markey and Hugh Lawson)

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By Duncan Miriri

NAIROBI (Reuters) – The World Bank cut Kenya’s economic growth forecast for this year by half a percentage point on Wednesday to 5.5 percent, citing drought, sluggish private sector credit growth and rising prices of oil.

The country is estimated to have expanded by 5.9 percent last year, the highest annual expansion in half a decade.

But the outlook has been hit by months of dry weather, that left 2.7 million people in need of food aid, and a drop in annual private sector credit growth to 4 percent in February from 17 percent at the end of 2015.

In its latest report on the Kenyan economy, the World Bank said growth would pick up after this year, driven by the expected normalisation of rainfall, a firmer global economy, a rebound in tourism and the resolution of challenges curbing credit growth.

“GDP growth is expected to accelerate to 5.8 percent and 6.1 percent in 2018 and 2019 respectively,” the Bank said.

The main risks facing the economy were the weather and any slowdown in economies of major trading partners, the bank said.

It urged the government to stick to its fiscal consolidation path and to review last year’s changes to the banking law, which capped commercial lending rates at 4 percentage points above the central bank rate.

Henry Rotich, the finance minister, set the deficit for the fiscal year starting in July at 6 percent of economic output and promised to reduce it further towards 4 percent in the 2019/20 fiscal year.

The budget deficits, which have driven up borrowing, have been used to fund a range of public investments in roads, railways and energy generation, the government says.

The cap on commercial lending rates, which was imposed last September, has been partly blamed for the slowdown in credit growth.

The World Bank said Kenya can quicken economic growth by boosting its construction sector, through offering innovative housing financing through the creation of mortgage refinance companies and the provision of housing finance guarantees.

There were less than 25,000 mortgages in Kenya and mortgage debt made up just 3.15 percent of the GDP in 2015, the bank said.

“Unlocking the residential housing market through the development of the housing finance market can provide a wide range of income opportunities,” the bank said.

(Editing by Jeremy Gaunt)

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