According to the African Development Bank (AfDB), Africa’s economic growth will accelerate in 2023 and 2024 as global monetary policy tightens.
The continent’s GDP growth is projected to rise to 4% this year and 4.3% in 2024 after a 3.8% expansion last year, the AfDB said in its annual African Economic Outlook on Wednesday.
However, the Outlook indicates that GDP growth is still below the 4.8% expansion in 2021, the AfDB added, noting that South Africa’s economy will plummet despite this growth.
Growth in the continent’s southern region is projected to slow sharply to 1.6% this year from 2.7% last year, dragged down by poor economic performance in South Africa, where scheduled power cuts of up to 10 hours a day have stymied the economy.
AfDB President Akinwumi Adesina called for “cautious optimism” in the face of risks including high global interest rates and a strong dollar while the continuing war in Ukraine could worsen food insecurity and push up prices further.
The AfDB forecasts the continent’s most industrialised economy to grow by 0.2% in 2023 and 1.5% in 2024.
“Average African inflation is set to accelerate again this year to 15.1%, from 14.2% in 2022,” the report showed.
The average debt-to-GDP ratio in Africa is expected to be 66% this year and 65% next year, the AfDB said, noting a rise in domestic debt.
“Domestic debt restructuring, therefore, should be part of the negotiations for the resolution of public debt crises in countries facing heightened risks,”the report showed.
