Sub-Saharan Africa growth to slow to 2.5% this year

BREAKING NEWSOctober 5, 2023 at 11:16 AM UTC

The latest Africa's Pulse report from the World Bank says Sub-Saharan African growth is expected to face headwinds. Several factors, including rising instability, lackluster growth in some of the region's largest economies, and increasing global economic uncertainty, are projected to contribute to a slowdown in economic expansion.

The report forecasts that real gross domestic product (GDP) in the region will decelerate to 2.5% in 2023, down from 3.6% in 2022. South Africa, Africa's most industrialized nation, is expected to see a modest expansion of 0.5% in 2023, hampered by energy and logistical challenges.

Meanwhile, Nigeria and Angola, the region's largest oil-producing countries, are projected to grow at rates of 2.9% and 1.3%, respectively, influenced by lower international oil prices and currency pressures that impact both oil and non-oil economic activity. The consequences of this economic slowdown are particularly pronounced for the region's most vulnerable populations, as weak growth translates into slow poverty reduction and limited job creation.

Key Takeaways

Notably, more than half of the countries in the region, specifically 28 out of 48, have seen downward revisions in their 2023 growth forecasts compared to the World Bank's April estimates. However, there is some positive news on the inflation front. The Bank anticipates that average consumer prices may decrease from 9.3% in 2022 to 7.3% in 2023. Additionally, fiscal balances are improving in African countries that are pursuing prudent and coordinated macroeconomic policies. To bolster a turnaround in the region's growth prospects and create job opportunities for its large youth population, the report emphasizes the importance of implementing reforms that support private sector growth, investing in education, and prioritizing the inclusion of girls and women in economic activities.