THE African Development Bank (AfDB) announced on Friday that Africa’s economic growth rate fell to 3.2 percent in 2023, down from 4.1 percent in 2022. However, the bank projected higher growth rates for all regions except central Africa in the coming year.
According to the AfDB, political instability and China’s economic slowdown have compounded the economic shocks caused by the Covid-19 pandemic and Russia’s war in Ukraine.
The final growth figure for 2023 was lower than the 3.4 percent forecasted by the AfDB in November. Additionally, the bank revised its growth estimates for central and north Africa downward due to factors such as a recession in oil-producing Equatorial Guinea and the aftermath of devastating flooding in Libya.
‘The shocks buffeting African economies since 2020 have damaged growth, with long-term implications,’ the AfDB stated in a report.
Despite these challenges, the AfDB highlighted that 15 African countries achieved economic growth rates of more than 5 percent in 2023. Among them were Ethiopia, which is restructuring its external debt, as well as Cote d’Ivoire, Democratic Republic of Congo, Mauritius, and Rwanda.
Looking ahead to 2024, the AfDB forecasts faster growth rates for all regions except central Africa. However, southern Africa is expected to remain the laggard, with a growth rate of 2.2 percent compared to 5.7 percent in east Africa.
The sluggish performance of southern Africa is attributed to the continued economic stagnation in South Africa, according to the AfDB. The region’s largest economy is predicted to grow by 1.1 percent in 2024, up from 0.8 percent in the previous year. The bank noted that South Africa’s economic challenges have exacerbated high unemployment, poverty, and inequality, hindering the country’s progress since the end of White minority rule.
In West Africa, Nigeria, the largest economy, is projected to grow by 2.9 percent in 2024, an increase of 0.4 percentage points from the previous year. The country’s sharply devalued currency has pushed up inflation, exacerbating a cost of living crisis.
Meanwhile, in Egypt, high inflation and foreign exchange shortages are expected to dampen growth, with a forecasted rate of 3.7 percent in 2024, compared to 4 percent in 2023.
The AfDB’s report underscores the challenges facing African economies amid global economic uncertainties and domestic factors. Despite the setbacks, the bank remains cautiously optimistic about the continent’s prospects for economic recovery and growth in the coming year.