THE economic trajectory of Africa in 2023 remains a subject of debate and analysis. Depending on whom you ask and when, the continent’s growth projection appears to sway between upward and downward trends. However, one consistent thread throughout the year has been the notion of Africa experiencing a marginal economic slowdown.
Both the World Bank and the International Monetary Fund (IMF) have been on the same page in projecting less optimistic figures for Africa’s economic prospects. According to the World Bank’s latest September Africa Pulse report, economic activity in sub-Saharan Africa (SSA) is anticipated to have further decelerated, dropping from 3.6 percent in 2022 to a modest 2.5 percent in 2023. This represents a downward revision of 0.6 percentage points from the earlier prediction in the report’s April 2023 edition.
Highlighting the severity of this downturn, the report underscores that 28 out of the 48 nations in Sub-Saharan Africa have witnessed downward revisions in their growth projections for 2023. Notably, Sudan’s growth prediction has been significantly lowered by 12.5 percentage points, primarily due to the devastation wrought upon the nation’s industrial foundation, educational infrastructure, and medical facilities by the armed conflict that erupted in April 2023.
The question that naturally arises is: What factors are contributing to this downward trend in Africa’s economic outlook? Several factors have played a role, including stringent monetary and fiscal policies in response to high inflation and fiscal instability, a heightened risk of debt distress, structural limitations like energy and transportation bottlenecks, and a surge in conflict and violence manifested through events such as coup d’états, protests, and increased social unrest across Sub-Saharan African nations.
Recent research on global growth patterns suggests that sub-Saharan Africa consistently exhibits lower poverty rates sensitive to economic expansion than other regions. This lower elasticity can be attributed to a weaker correlation between GDP and household consumption growth in Sub-Saharan Africa, implying that African countries need higher per capita growth to match the living standard improvements seen in households in other parts of the world.
However, it is essential to note that there are African countries that have demonstrated impressive growth in 2023, bucking the regional downward trend. Here are the top 10 countries in Sub-Saharan Africa with notable growth projections:
- Rwanda: 5% – 6%
- Democratic Republic of Congo: 5% – 6%
- Côte d’Ivoire: 5% – 6%
- Mozambique: 5% – 6%
- Ethiopia: 4% – 6%
- Benin: 4% – 6%
- Cabo Verde: 4% – 6%
- Uganda: 3% – 5.5%
- Togo: 3% – 5%
- Tanzania: 3% – 5%
While challenges persist in Africa’s economic landscape, these countries showcase resilience and potential, offering hope for continued growth amid the complex economic dynamics of the continent.