Many sub-Saharan African economies are facing rising inflation and the forecast stands at 7% for 2015 and 7.25% for 2016. However, it is true that this is not a uniform trend as Zimbabwe, known for its hyperinflation, is now enduring deflation.The IMF calls on African governments to adopt policies to lessen the impact of this economic slowdown, such as allowing currency depreciation to help boost exports.It also urges governments to address income inequalities that are particularly high in the region, as well as gender inequality. The IMF has warned that the economies of sub-Saharan Africa are facing contraction this year.In its latest African Economic Outlook, the fund forecasts growth in the region of 3.75% this year, the slowest growth in six years.This is what you should know:China is Africa’s biggest trading partner the slowdown of the Chinese economy has brought new challenges for metal exporters, like South Africa and Zambia. Both South Africa and Zambia have suffered currency devaluations as a consequence. Meanwhile the dramatic fall in oil prices has hit major petro-economies, such as Nigeria and Angola. The impact on Africa’s top eight oil producers will constrain economic growth across the continent as oil accounts for 50% of its GDP. The South African rand has lost 22% of its value against the dollar, while the Zambian kwacha sustained a loss of 45%. At the same time, Standard & Poor’s and Moody’s have downgraded Zambia’s credit rating making it harder for the country to borrow.
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