The African Development Bank has predicted that 53 of the 54 African nations will maintain a positive growth trajectory and a stable outlook by 2023/24, despite numerous shocks. Prof. Kevin Urama, Vice President for Economic Governance and Knowledge Management at the bank, stated that Africa’s youthful population, abundant natural capital and increasing economy offer vast opportunities for rebound, especially for low-income economies. Most low-income economies are located in Africa, with Urama noting that the IMF report comes at a crucial time as these economies are dealing with complicated domestic and external economic shocks.
Inflation is rapidly increasing, with food and commodity prices continuing to soar, causing food insecurity and raising the risk of social unrest in low-income countries. According to data from the World Food Programme, over 345 million people in 82 countries are suffering from acute food insecurity. Urama stated that last year, over 15 million more people were pushed into extreme poverty in Africa due to food pricing inflation and high energy prices. Urama said the African Development Bank’s 2023 Africa’s Macro-Economic Performance and Outlook report indicates that inflationary trends could ease in 2023-2024, providing some cautious optimism for the continent’s outlook.
Roland Kangni Kpodar, International Monetary Fund Deputy Division Chief for Strategy, Policy and Review, presented the IMF report. He stated that low-income countries were disproportionately impacted by the Covid-19 pandemic, with the health systems of these countries already fragile before the pandemic. School closures resulted in a setback for human capital development in these countries. The pandemic’s tremendous adverse effects on low-income countries’ economies revealed their limited policy space even before the pandemic, as well as their high structural vulnerability to such shocks, he added.
Although there are significant challenges ahead for African and middle-income countries in 2023, Urama maintains that Africa’s five fastest-growing economies will re-join the ten fastest-growing economies in the world. With various shocks threatening recovery and momentum, the IMF report comes at a vital time when these economies are navigating complex domestic and external economic challenges. However, Africa’s abundant natural resources, increasing economy and a massive youthful population offer a huge opportunity for low-income economies to bounce back.
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