"Africa: GDP growth to stabilise in 2023 and 2024"

" Africa: GDP growth to stabilise in 2023 and 2024 \r\n\r\nAfrican economies remain resilient with a stable outlook in 2023-2024, despite the tightening global financial conditions, the African Development Bank (AfDB) has projected in a new report.\r\n\r\nThe\u00a0report, Africa\u2019s Macroeconomic Performance and Outlook (MEO) 2023, estimates Africa\u2019s average GDP to stabilize at 4% in the next two years, up from 3.8% in 2022.\r\n\r\nPresenting the report on 17 February on the sidelines of the 36th African Union Assembly in\u00a0Addis Ababa, AfDB chief economist and vice-president Kevin Urama said that the continent could benefit from high demand for its commodities as countries seek alternatives for food and energy in response to disruptions caused by the war in Ukraine.\r\n\r\nThe continent, he noted, remains a treasure trove for smart investors globally, but it must strive for higher growth rates, more inclusive economies, and greater resilience to external shocks.\r\n\r\n\u201cThe stable outlook projected for 2023\u20132024 reflects the continuing policy support in Africa, global efforts to mitigate the impact of external shocks and rising uncertainty in the global economy,\u201d he said.\r\n\r\nThe new publication, to be released in the first and third quarters of each year, will provide African policymakers, global and domestic investors, researchers, and other development partners with an up-to-date, evidence-based assessment of the continent\u2019s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments.\r\n\r\nUrama urged bold policy actions. \u201cTo meet the significant financing gaps in\u00a0 Africa , it is imperative to enact policies that can mobilize and leverage private financing for development in Africa,\u201d he said.\r\n\r\nThe unfavorable global conditions have led to rising inflation, higher debt servicing costs and increased risk of debt distress in developing countries, including Africa.\r\n\r\n\u201cAs in many emerging market economies, tightening financial conditions and the appreciating US dollar have had dire consequences for most African economies,\u201d Urama said. It has also become difficult for African countries to access international capital markets for new financing, he added.\r\n\r\nMost African currencies, especially in commodity-exporting countries, lost substantial value against the dollar in 2022 due to monetary policy tightening in the United States. The depreciation rates ranged from 21% in Malawi to 69% in South Sudan.\r\n\r\nUrama cautioned that currency weaknesses in Africa\u2019s more globally integrated economies, such as Algeria, Kenya, Nigeria, and South Africa, may persist in 2023.\r\n\r\n\u201cKey drivers of the currency depreciations include the tightened global financial conditions and weak external demand, macroeconomic imbalances, constrained revenues and weak investment flows, and political risk aversion associated with countries\u2019 election cycles,\u201d Urama said.\r\n\r\nHe said that African countries\u2019 fiscal positions have already been stretched by Covid-19 policy responses and support for vulnerable populations against rising food and energy prices amid high debt and the impacts of climate change.\r\n\r\nOther economic headwinds include the spillover effects of rising geopolitical tensions, particularly the Russian invasion of Ukraine. These conditions are pushing price stability beyond most central banks\u2019 grasp."

"Africa: GDP growth to stabilise in 2023 and 2024"

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