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African Economic Growth Slows Amid Global Challenges

The African Development Bank (AfDB) has revised its growth forecasts for Africa, projecting real GDP growth to decline to 3.4% in 2023 from 4% in 2022. The bank expects growth to rebound to 3.8% in 2024.

The AfDB attributed the downward revision to several factors, including the lingering effects of the COVID-19 pandemic, the war in Ukraine, and global economic headwinds.

“The scarring long-term effects” of the COVID-19 pandemic, coupled with the surge in food and energy prices caused by Russia’s invasion of Ukraine, have hampered Africa’s economic recovery, the bank noted.

These factors have been exacerbated by “pockets of political instability across the continent, weak export demand due to tepid global growth, monetary policy tightening and associated increased cost of borrowing,” the AfDB added.

African Economic Growth Slows Amid Global Challenges

The bank’s biggest cut to a 2023 growth forecast was for central Africa, where growth is now projected to reach 4.1%, down from 4.9% in May’s forecast. This revision reflects the recent coup in Gabon and ongoing conflict in eastern Democratic Republic of Congo.

Growth forecasts for East Africa and North Africa were also revised downward, by 0.7% and 0.4%, respectively. The decline in East Africa’s forecast is attributed to the civil war in Sudan and Kenya’s debt challenges, while North Africa’s slowdown is linked to ongoing economic reforms.

Southern Africa is set to record the continent’s weakest growth in 2023, at 1.6%, due to power outages that are constraining economic activity in South Africa, the region’s largest economy.

Despite the overall slowdown, the AfDB noted that countries that do not rely heavily on commodity exports are expected to experience higher growth rates than those that do.

The bank emphasized the need for African countries to implement policy measures to address the challenges hindering growth, such as improving governance, investing in infrastructure, and promoting regional integration.

By addressing these challenges, Africa can foster a more resilient and inclusive economic recovery.

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