Africa’s economic growth will slow this year and recover slightly in 2024, the African Development Bank (AfDB) said on Wednesday, as it cut its GDP forecasts for the continent amid political instability, weak global growth and high interest rates.
Real GDP growth is expected to fall to 3.4% this year from 4% in 2022, before rising to 3.8% in 2024, the ADB said in a report. In May, ADB predicted the economy would grow 4% in 2023 and 4.3% in 2024, after growing 3.8% in 2022.
The “long-term scarring effects”, the impact of the COVID-19 pandemic, combined with Russia’s invasion of Ukraine, which sent food and energy prices soaring in 2022, has delayed Africa’s initially strong economic recovery after the pandemic, the bank said.
“These factors were exacerbated by pockets of political instability across the continent, weak demand for exports due to tepid global growth, tightening monetary policy and associated increases in the cost of borrowing,” the ADB added.
Most African countries have been excluded from international debt markets due to prohibitively high interest rates since the beginning of 2022, with Zambia and Ghana defaulting and Ethiopia, Kenya and Nigeria struggling to restructure their debts. external.
The ADB’s biggest cut to its 2023 growth forecast was for Central Africa, where there has been a coup d’état in Gabon and an ongoing conflict in the east of the Democratic Republic of Congo, to 4.1%, compared to 4.9% in May.
East Africa’s growth forecast was cut by 0.7% to 3.4%, amid civil war in Sudan and with Kenya under pressure to repay or refinance a $2 billion bond due in June 2024 The growth forecast for North Africa was also reduced by 0.7%.
Southern Africa is expected to record the lowest growth on the continent in 2023, at 1.6%, as ongoing power cuts restrict production in the region’s largest economy, South Africa, and weak oil market performance affects the Angolan economy.
Countries that do not export raw materials are expected to register a higher rate of economic growth than that of raw material exporters.
By Economic Editor
Angola Portal