NAIROBI, Kenya, April 5 – Economic growth in Sub-Saharan Africa is set to slow to 3.1 per cent in 2023 from 3.6 per cent in 2022, a new World bank report said Wednesday.
Based on regions, the real gross domestic product (GDP) growth of the Western and Central Africa subregion is estimated to decline to 3.4 per cent in 2023 from 3.7 percent in 2022, while that of Eastern and Southern Africa declines to 3.0 per cent in 2023 from 3.5 per cent in 2022.
According to the latest Africa’s Pulse by World Bank, growth across Sub-Saharan Africa remains sluggish, dragged down by uncertainty in the global economy, the underperformance of the continent’s largest economies, high inflation, and a sharp deceleration of investment growth.
The report recommended that in the face of dampened growth prospects and rising debt levels, African governments must sharpen their focus on macroeconomic stability, domestic revenue mobilization, and debt reduction.
They were also urged to take up productive investments to reduce extreme poverty and boost shared prosperity in the medium to long term.
“Weak growth combined with debt vulnerabilities and dismal investment growth risks a lost decade in poverty reduction,” said Andrew Dabalen, World Bank Chief Economist for Africa.
“Policymakers need to redouble efforts to curb inflation, boost domestic resource mobilization, and enact pro-growth reforms—while continuing to help the poorest households cope with the rising costs of living.”
In the continent, debt distress risks remain high with 22 countries in the region at high risk of external debt distress or in debt distress as of December 2022.
Unfavorable global financial conditions have increased borrowing costs and debt service costs in Africa, diverting money from badly needed development investments and threatening macro-fiscal stability.
Despite these challenges, the report noted that many countries in the region are showing resilience amidst multiple crises.
These include Kenya, Cote d’Ivoire, and the Democratic Republic of Congo (DRC) who grew at 5.2, 6.7, and 8.6 per cent respectively in 2022.
In the DRC, the mining sector was the main driver of growth due to an expansion in capacity and recovery in global demand.
Harnessing natural resource wealth provides an opportunity to improve fiscal and debt sustainability of African countries, but the report cautions that this can only happen if countries get policies right and learn the lessons from the past boom and bust cycles.
