Browsing: Africa’s economic growth

World Economic Forum 2023

The continent as always, has great promise. This was the unanimous conclusion from the just-ended World Economic Forum, which is traditionally held at the Swiss resort town of Davos every year. However, significant obstacles stand in the way of the continent reclaiming its mantle of economic growth.

  • The World Economic Forum held in Davos every has just ended. This year’s conference ran under the theme of Collaboration in a fragmented world.
  • Africa was on the agenda of the World Economic Forum as is frequently the case.
  • Discussions on Africa at the conference mainly centred on how the continent can regain its growth trajectory.

The World Economic Forum (WEF) identified four principal factors causing economic headwinds in Africa and will stall its economic growth as a continent unless dealt with. The so called “stallers” of Africa’s economic growth are and will remain as conflict, COVID, climate, and cost of living.

WEF…

African countries have started recovering from the effects of the COVID-19 pandemic after most economies shrunk due to the crisis.

The continent is home to over a billion people who live in low, lower-middle, upper-middle, and high-income countries.

The economy in the Sub-Saharan Africa (SSA) region is projected to expand by 3.6 per cent in 2022, down from 4 per cent in 2021, according to World Bank.…

Kenya is commonly considered to be East Africa’s financial hub. Its economic growth has increased steadily in the last decade due to significant political, structural and economic reforms. The SME sector stands out as the key driver of Kenya Vision 2030 which seeks to transform the country into a newly industrialized middle income country by 2030. SMEs are crucial in encouraging industrialization and helping to eradicate poverty by creating employment and raising income levels.

Social and Economic Benefits

SMEs complement large firms as subsidiary units; because they are more flexible they can effectively meet the needs of the market. They have a facilitative role in entrepreneurial activities across the country in both urban and rural settings, thus contributing immensely towards the socio-economic development and transformation of the country. SMEs are can ensure the achievement of sustainable development goals (SDGs), promotion of inclusive economic growth and sustainable industrialisation and fostering as

Africa’s road to recovery will require massive investments across countries, as well as financial support from the international community, a new analysis by the World Bank has said.

The study dubbed Africa’s Pulse: Charting the Road to Recovery has also recommended bold reform agenda that includes policies that create fiscal space, along with policies to speed up job creation.

The report noted that for non-resource-intensive countries, the decline in growth in 2020 is expected to be moderate, on average.

“In several non-resource-intensive countries, including Côte d’Ivoire, Ethiopia, and Kenya, growth is expected to slow substantially, but remain positive, owing to their more diversified economies. This is happening even as the rate of unemployment is increasing globally. Meanwhile, the tourism-dependent economies, especially those of Cabo Verde, Mauritius and the Seychelles, experienced a sharp contraction as exceptionally weak international tourism severely impacted the service sector.” It states.

 

Also Read: World Bank

Africa’s economic growth remained stable in 2019 at 3.4% and is on course to pick up to 3.9% in 2020, and 4.1% in 2021 as revealed in the African Development Bank’s 2020 African Economic Outlook.

The bank said that the slower than expected growth is partly due to the moderate expansion Africa’s Big five such as Algeria, Morocco, Egypt, Nigeria and South Africa – whose joint growth rate compared with the average of 4.0% for the rest of the continent was at an average rate of 3.1%.

In 2019, investment expenditure for the first time in a decade accounted for over 50% of GDP growth compared to consumption.

The bank noted that the shift can aid in sustaining and potentially speeding the future growth in Africa, increase current and future productive base in Africa while improving the productivity of the workforce.

Also Read: Africa can no longer be ignored- AfDB