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Sub-Saharan Africa’s Gross Domestic Product (GDP) growth is expected to fall to 1.6 per cent this year, its lowest level in two decades, from 3 per cent in 2015, according to the latest Africa’s Pulse report of the World Bank.

The biannual report, which was unveiled in Abidjan, Cote d’Ivoire, today attributes the sharp decline in SSA’s aggregate growth to the challenging economic conditions – low commodity prices, tight financial conditions, and domestic policy uncertainties – in the region’s largest economies such as Nigeria and South Africa.

In the last edition of the report, which was released in April, the World Bank lowered its 2016 growth forecast for the region to 3.3 per cent from a previous forecast of 4.4 per cent announced in October 2015. While many SSA countries registered a sharp slippage in economic growth this year, the World Bank said others – Ethiopia, Rwanda, and Tanzania – have continued to post annual average GDP growth rates of over 6 per cent. Several countries – including Côte d’Ivoire and Senegal – have also become top performers, the Washington D.C.-based multilateral institution said.

“Our analysis shows that the more resilient growth performers tend to have stronger macroeconomic policy frameworks, better business regulatory environment, more diverse structure of exports, and more effective institutions,” Albert Zeufack, World Bank Chief Economist for Africa, said.

Given that commodity prices are expected to remain below their 2011 to 2014 peaks despite a recent pickup, the World Bank, however, said it expects a modest recovery in SSA with real GDP growing by 2.9 per cent in 2017 and 3.6 per cent in 2018. The bank said the decline in commodity prices signals an urgent need for economic diversification in SSA, including through improvements in agriculture.

“Improving the productivity of smallholder farms is central to lifting rural incomes and reducing poverty in Sub-Saharan Africa,” said Punam Chuhan-Pole, Lead Economist for World Bank Africa, who wrote the report. “But unleashing this productivity requires investing in rural public goods such as rural infrastructure, agricultural research, and use of improved technologies, as well as in availability of good data and evidence.”