Growth across Africa remains sluggish due to the underperformance of its largest economies, high inflation, and a deceleration of investment growth, a World Bank report said on Wednesday.
Governments were urged to focus on macroeconomic stability, domestic revenue mobilisation, debt reduction and productive investments to reduce poverty and boost shared prosperity.
Growth in Sub-Saharan Africa is set to slow from 3.6% in 2022 to 3.1% in 2023, according to the Africa’s Pulse economic update for April 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 or 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, increase opportunities, create jobs, and accelerate economic transformation.