The group warned that the overall positive outlook being overshadowed by pockets of acute difficulty in a few countries.
(READ MORE: IMF says sub-Saharan Africa faces heightened risk of capital outflows)
“In Guinea, Liberia, and Sierra Leone, the Ebola outbreak is exacting a heavy human and economic toll. In addition, the security situation continues to be difficult in some countries, including the Central African Republic and South Sudan,” said the International Monetary Fund (IMF).
The report also said, in a few other countries activity was facing headwinds from domestic policies.
“In South Africa growth remains lacklustre under the drag of difficult labour relations, low confidence, and inadequate electricity supply,” reported the group.
“More worrisome, in a few countries, including Ghana and, until recently, Zambia, large macroeconomic imbalances have resulted in pressures on the exchange rate and inflation.”
Strong growth in sub-Saharan Africa’s economies should underpin regional expansion in 2014 and 2015, the IMF added.
The outlook also reported growth momentum remaining particularly strong in Nigeria, the region’s largest economy, and in the region’s low income countries.
“In most countries, growth benefits from a combination of infrastructure investment, expanding services, and robust agricultural production,” said the IMF.
Recent revisions of national accounts data, notably in Nigeria, have also revealed that the economies of the region are more diversified than previously thought, highlighting in particular the large role played by services.
The IMF warned that adverse effects of Ebola could severely haemorrhage the regional economy.
“A more protracted Ebola outbreak or a wider extension of the epidemic could have severe consequences for the economy of the region, as it would undermine trade, transport activities, and investment,” IMF said.
(READ MORE: IMF says Ebola hits economic growth in W. Africa)
“In other parts of sub-Saharan Africa, a deterioration of the security situation could also have severe regional spill overs.”
In a few other countries, rapid growth has masked increasing fiscal vulnerabilities, especially where large deficits have been prompted by an acceleration of recurrent spending.
The outlook said although global growth was projected to gradually strengthen, an expected deceleration in emerging markets and a rebalancing of Chinese demand toward private consumption will make the external environment less supportive for the region.
“In particular, these trends could soften global demand for key sub-Saharan African exports, including commodities.”
The group said tightening financial conditions stemming from a faster-than-expected normalisation of U.S. monetary policy, adverse geopolitical developments, or a worsening of the countries’ fundamentals could also result in lower and more expensive access to external funding and a scaling down of foreign direct investment.
“For the vast majority of the countries the over-riding policy objective remains sustaining high growth to facilitate employment creation and inclusive growth, while preserving macroeconomic stability,” said the group.
“Countries should continue to prioritise growth-enhancing measures, including by directing public spending toward investment in infrastructure and other development spending and safeguarding social safety nets.”
The group noted the need to address the challenge of infrastructure deficit in the region.
IMF said the major obstacle to addressing the continent’s infrastructure deficit does not generally appear to be a lack of financing, but rather capacity constraints in developing and implementing projects.
The study said countries should seek to make the most of new financing instruments and flows by improving their absorptive capacity and removing remaining regulatory constraints, while controlling fiscal risks and maintaining debt sustainability.