Africa’s economic growth to stabilise – AfDB

The African Development Bank (AfDB) has predicted that Africa’s economic growth will stabilize at 4% over the next two years, and inflation will slow as the continent rebounds from the pandemic and external shocks such as the Ukraine war.

While many African countries were hit hard by the economic fallout of the pandemic, Africa’s GDP growth slowed to 3.8% in 2022 from 4.8% in 2021. However, the bank projects that growth will accelerate to 4.0% this year and 3.9% in 2024, which is higher than world averages.

AfDB President Akinwumi Adesina stated in a report that “Africa has demonstrated continued resilience” and that “the top five performing African countries before the COVID-19 pandemic are projected to grow by more than 5.5%.” Senegal and Mozambique will be among Africa’s fastest-growing economies, with Senegal’s economy projected to grow 10.2% in 2023 and Mozambique’s economy expanding 8% next year.

Africa’s two largest economies, Nigeria and South Africa, will remain a drag on continental growth, with projections of 3.1% and 1.4% respectively for this year. Average inflation, which reached 13.8% last year, the highest rate in more than a decade, will ease to 8.8% by 2024.

The AfDB also warned that Africa’s expected economic improvement remains fragile. The number of African countries in debt distress or at high risk of it has increased since the start of the pandemic.

Tightening monetary policy in wealthy countries has increased the strain on Africa, driving up debt service costs, restricting access to international capital markets, and increasing instability in foreign exchange markets.