- East Africa is anticipated to have the highest performance, surpassing other regions.
- Central Africa is projected to experience growth of 4.7% in 2022, up from 3.6% in 2021.
- West Africa’s growth fell to 3.6% in 2022, down from 4.4% in 2021. In the medium term, it is anticipated to increase, hitting 4.1% in 2023.
- In 2022, growth in Southern Africa is projected to continue modest, falling to 2.5% from 4.3% in 2021.
The slowing of Africa’s average growth conceals cross-regional variances, which primarily reflect disparities in the structure of economies, commodity dependency, differential impact of global exogenous shocks, and domestic policy responses to buffer the impact of these shocks.
According to the new biannual publication of the African Development Bank Group, Africa’s Macroeconomic Performance and Forecast, East Africa is anticipated to have the highest performance, surpassing other regions.
This, as economies in the region continue to implement post-Covid-19 epidemic recovery initiatives, such as policies to promote private sector growth.
After two years of global shocks brought on by the pandemic and the Russia-Ukraine war, which interrupted the global supply chain, and in the midst of soaring global inflation, African countries are exploring different options to sail through the economic turmoil.
AfDB adds: “African economies are poised to overcome numerous domestic and global shocks and return to a path of economic recovery, stability, and growth.”
Africa’s growth slowed to an average of 3.8% in 2022 due to the lingering consequences of theCovid-19 pandemic, the ravages of growing climate change, and the impact of rising geopolitical conflicts and tension.
The lender believes that Africa’s economies would need comprehensive knowledge and insights to navigate a labyrinth of linked global threats in order to sustain growth, as mentioned in the research.
Mixed results for Eastern Africa countries
The average rate of growth in East Africa is projected to increase to five percent this year and to five and a half percent next year as the region rallies to achieve the continent’s highest performance.
This is after the rate moderated to 4.2% in 2022 from 5.1% in 2021.Despite a somewhat varied production structure, most nations in the region are net importers of commodities and face the brunt of high international pricing and recurring climate shocks such as drought, notably in the Horn of Africa.
Hence, the slowdown in 2022 was attributable mostly to the consequences of these shocks, which were worsened by disruptions in global supply systems.
Tight monetary and fiscal policy to contain inflation has also restrained domestic household consumer demand, exacerbating the effects of exogenous shocks on economic activity in regions with some of the most fragile economies due to internal conflicts.
Agriculture and manufacturing activity reductions, sluggish private sector credit expansion, and a rise in state debt all contributed to restrained household consumption.
Seychelles (8.3 percent), Rwanda (6.9 percent), and Kenya (5.5 percent) were the countries with the highest growth rates in 2022, according to AfDB .
In contrast, the fragility and structural flaws of South Sudan’s economy are anticipated to persist, with the recession expected to last until 2023, followed by a rebound in growth to 4.6%in 2024. Rwanda is anticipated to lead in growth in2023 and 2024, with growth rates exceeding seven percent, as infrastructure expenditure increases.
Uganda and Ethiopia are likewise anticipated to experience robust growth in 2023 and 2024,reaching five percent due to advances in Uganda’s oil sector and Ethiopia’s sustained infrastructure expenditure.
“Despite the slowdown caused by several shocks, Africa maintained a positive growth rate in2022, with stable projections for 2023 and 2024. African economies are undoubtedly resilient,”noted Akinwumi Adesina, president of the African Development Bank.
Prospects in other economic regions
Equatorial Guinea was among the nations most adversely affected by the epidemic, with long-lasting contractions lasting until 2021, therefore its rapid growth in 2022 marked a return to its prior economic trajectory.
West Africa growth
In Nigeria, the largest economy in the area, growth is projected to have slowed to 3.0 percent in2022, down from 3.6 percent in 2021, but still higher than the country’s population growth rate of roughly 2.4 percent.
“South Africa’s close commercial linkages with other countries in Southern Africa mean that shocks afflicting the country are conveyed directly or indirectly to the rest of the region,” states the AfDB.