THE World Bank’s latest Africa Pulse report, released on Wednesday, paints a sobering economic outlook for sub-Saharan Africa. It forecasts a deceleration in economic growth, with the region’s GDP expected to expand by only 2.5 percent in 2023, down from 3.6 percent in 2022.
The report emphasises the urgent need for sub-Saharan Africa to achieve stability, stimulate growth, and create job opportunities to prevent what the World Bank terms a potential ‘lost decade’ for the region.
Andrew Dabalen, the World Bank’s chief economist for Africa, highlighted that the most vulnerable segments of the population continue to bear the brunt of the economic slowdown. He stressed that weak growth hampers poverty reduction and job creation, particularly concerning as about 12 million young Africans enter the labour market annually.
Dabalen underscored the importance of policymakers transforming their economies and facilitating better job opportunities for the region’s growing workforce.
The report offers specific economic projections for key African countries. South Africa, for instance, is anticipated to experience mi
nimal GDP growth of just 0.5 percent in 2023, primarily due to persistent challenges in energy and transportation infrastructure.
In Nigeria and Angola, economies are expected to grow at 2.9 percent and 1.3 percent, respectively. Lower international prices and currency pressures affecting both oil and non-oil sectors are cited as factors influencing these growth rates. Additionally, increased conflict and violence in the region are impeding economic activity, a trend that could worsen with climate-related shocks.
Sudan is facing a severe economic contraction, with the report projecting a 12 percent decline in economic activity. Internal conflicts have disrupted production, eroded human capital, and weakened state capacity in the country.
Nicholas Woolley, a World Bank economist involved in the report, emphasised the urgency of addressing the jobs challenge in sub-Saharan Africa. He highlighted the substantial opportunities presented by demographic transitions and stressed the need for an ecosystem fostering private-sector development, firm growth, and skill development aligned with business demand.
The report also addresses the absence of labour-intensive manufacturing in Africa, which limits indirect job creation through support services and international trade. A lack of capital is identified as a hindrance to the structural transformation needed for high-quality job creation.
Despite the challenging economic landscape, the report anticipates a decrease in inflation from 9.3 p
ercent in 2022 to 7.3 percent in 2023. It also notes improved fiscal balances in African countries pursuing prudent and coordinated macroeconomic policies.
On a regional level, the Eastern African Community (EAC) is projected to grow by 4.9 percent, while the West African Economic and Monetary Union (WAEMU) is expected to achieve a growth rate of 5.1 percent.
However, the report raises concerns about widespread debt distress, with 21 countries in the region classified as at high risk of external debt distress or already in debt distress as of June.
