Darfur follow-up
Africa’s economic growth will slow this year and will only partially rebound in 2024, the African Development Bank said, as it cut its GDP forecast for the continent amid political instability, weak global growth and rising interest rates.
He said in a report that real GDP growth is expected to decline to 3.4% this year from 4% in 2022, before rising to 3.8% in 2024. He expected in May that the economy would grow by 4% in 2023 and 4.3 % in 2024, after growing by 3.8% in 2022.
The bank said that the “long-term effects” of the Covid-19 pandemic, coupled with the Russian invasion of Ukraine, which led to higher food and energy prices in 2022, initially hampered Africa’s strong economic recovery from the pandemic.
“These factors have been exacerbated by pockets of political instability across the continent, weak export demand due to tepid global growth, tightening monetary policy and the associated increase in the cost of borrowing,” he added.
He noted that most African countries have been barred from entering international debt markets due to extremely high interest rates since early 2022, with Ghana defaulting and Ethiopia announcing that it intends to restructure its only external bond.
The African Development Bank’s largest cut was to 2023 growth forecasts for Central Africa, where there was a coup in Gabon and ongoing conflict in eastern Democratic Republic of the Congo, to 4.1% from 4.9% in May.
Growth forecasts in East Africa were cut by 0.7% to 3.4%, amid the civil war in Sudan and with Kenya under pressure to repay or refinance a $2 billion bond maturing in June 2024. Growth forecasts in North Africa were also cut by 0.7%.
The South African region is expected to record the lowest growth on the continent in 2023, at 1.6%, as ongoing power outages restrict production in South Africa, the largest economy in the region.
Countries that do not export commodities are expected to experience a higher rate of economic growth, even as the growth rate for commodity exporters is lower.
