A World Bank report has stated that growth across Africa has remained sluggish. This is due to poor performance in its large economies, high inflation and slowing investment growth. Governments are urged to focus on domestic revenue mobilization, debt reduction, productive investment and macroeconomic stability to reduce poverty and increase shared prosperity.
Growth in sub-Saharan Africa is expected to slowly decrease to 3.1% in 2023 from 3.6% in 2022. This data is according to the African Pulse April Economic Update released on Wednesday.
The report noted that the growth recovery in powerhouse Nigeria for 2023 (2.8%) –
“is still fragile as oil production remains subdued.”
In South Africa, economic activity is projected to weaken further this year (0.5% annual growth) as the energy crisis deepens.
The real Gross Domestic Product (GDP) growth of the Western and Central Africa subregion could decline to 3.4% in 2023 from 3.7% in 2022.
World Bank’s chief economist for Africa, Andrew Dabalen warned that weak growth, debt vulnerabilities, and dismal investment growth may cause “a lost decade in poverty reduction”.
“Policy makers need to redouble efforts to curb inflation, boost domestic resource mobilisation, and enact pro-growth reforms—while continuing to help the poorest households cope with the rising costs of living,” Dabalen said.
The report further revealed 22 countries in Sub-Saharan Africa were at high risk of external debt distress. That is if they aren’t already in debt distress as of December 2022.
A senior economist at World Bank, James Cust, believed rapid global decarbonisation will bring significant economic opportunities to the continent.
Cust said metals and minerals, in larger quantities for low-carbon technologies like batteries, could boost fiscal revenues. They could also increase opportunities, create jobs, and accelerate economic transformation.
cc: Daily Post Ng
