Nigeria, South Africa economic underperformance threatens Africa’s growth prospects – World Bank
The World Bank has raised concerns over the slow growth of African economies, pointing to the underperformance of Nigeria, South Africa, Egypt, and other major economies as the primary cause. The global bank also cited high inflation and declining investment growth as factors that are negatively impacting economic growth in Africa.
The World Bank emphasized that African governments must prioritise macroeconomic stability, debt reduction, domestic revenue mobilization, and productive investments to reduce poverty and promote shared prosperity in the medium to long term. The bank further projected that economic growth in Sub-Saharan Africa is expected to decline from 3.6% in 2022 to 3.1% in 2023.
The report revealed that South Africa’s economic activity is expected to weaken further in 2023 as the energy crisis worsens, while Nigeria’s growth recovery for 2023 remains fragile due to subdued oil production. Additionally, the real GDP growth of the Western and Central Africa subregion is estimated to decline to 3.4% in 2023 from 3.7% in 2022, while that of Eastern and Southern Africa is expected to decline to 3% in 2023 from 3.5% in 2022.
The World Bank Chief Economist for Africa, Andrew Dabalen, cautioned that weak growth, coupled with debt vulnerabilities and dismal investment growth, risks a lost decade in poverty reduction. Policymakers need to double their 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.
Despite the challenges, the report noted that several countries in the region are showing resilience, including Kenya, Cote d’Ivoire, and the Democratic Republic of Congo (DRC), which grew at 5.2%, 6.7%, and 8.6%, respectively in 2022.
The report further found that rapid global decarbonization would provide significant economic opportunities for Africa. With the right policies, metals and minerals could boost fiscal revenues, create job opportunities, and accelerate economic transformation.
