Macroeconomic trends in sub-Saharan Africa are playing out as expected. The IMF's recently released regional economic outlook for the region showed that last year economic growth was the lowest in 15 years at 3.4%. It is expected to slow further to 3% this year before improving slightly in 2017.Several factors are negatively affecting growth in Africa. First is the slowing and rebalancing of Chinese growth. Second is the associated decline in commodity prices.Third is the rising cost of borrowing facing many African governments and corporations brought about by rising expectations that the US Federal Reserve will eventually raise interest rates.Finally, severe drought in Southern Africa and East Africa is hurting growth and placing upward pressure on inflation.story_article_left1The decline in commodity prices has many macroeconomic consequences for sub-Saharan Africa, where commodities make up the bulk of export and tax revenues.Trade and current account deficits are rising and it is becoming increasingly difficult to fund the rising deficits.Although bond yields, the cost of borrowing for governments, have generally increased in emerging-market economies, the increases have been greater for sub-Saharan Africa's so-called frontier markets.The disproportionate increase reflects expectations of a gradual Fed hiking cycle, the recent bout of global financial market volatility and lower portfolio and cross-border bank loans flowing into the region.Further, the combination of rising budget and current account deficits coupled with declining capital flows and higher bond yields has placed exchange rates across the region under pressure. This, coupled with a drought-induced increase in food prices has led to rising inflation.Government debt levels are also rising due to weaker exchange rates.While global liquidity was abundant and dollar funding was cheap, many governments in the region borrowed in hard currency. Exchange-rate depreciation has seen the value of those loans in local currency terms balloon.The advice from multilateral institutions to prudently tighten fiscal monetary policy is difficult to argue against. Governments are advised to reduce spending in a way that protects the least well-off.block_quotes_start The promotion of long-term diversification of sub-Saharan Africa's economy from commodities must be a priority block_quotes_endGovernments should also make a concerted effort to broaden their tax base and improve revenue collection to compensate for lower taxes from mining activity in the short term and stabilise tax revenues in different phases of the commodity and business cycle in future.Central banks should raise rates to curb inflation. Policymakers should intervene in exchange rates only to lean against disorderly movements.In sum, the short-term outlook is uninspiring. However, there is overwhelming evidence of progress.In the past 15 years, the region has grown much faster with lower rates of inflation than in the preceding 20 years. This was not only due to higher commodity prices but also to real supply-side reforms.story_article_right2For example, while still lagging global averages, transport links in Africa are improving, as is the ease of starting and running a business. Living standards have improved.The African middle class is small but has grown in recent years.Poverty and inequality remain significant challenges.However, the number of those living on less than $2 (about R30) a day has been falling.To bolster the progress made over the past 15 years, the promotion of long-term diversification of sub-Saharan Africa's economy from commodities must be a priority.This will require continued investment in the region's supply-side capabilities, which include power and logistics, the development of appropriate skills, the continual promotion of a business-friendly regulatory environment and an appropriate tax regime.This, coupled with the region's young population, would increase the likelihood of sustainable and inclusive growth.Nxedlana is FNB's chief economist..