World Bank

Sub-Saharan Africa’s Economy to Grow by 3.6% in 2022: World Bank’s Report

ADDIS ABABA – The World Bank has forecasted for Sub-Saharan Africa’s economy to accelerate slightly to 3.6% in 2022 and rise further to 3.8% in 2023.

However, the outlook is nearly a full percentage point below the 2000/19 average.

This reflects the continued effects of the pandemic, reduced policy support, and policy uncertainty and worsening security situation in some countries, says the Bank’s Global Economic Prospects report.

The report says high prices for food commodities like coffee will benefit agricultural produce exporting countries in East Africa including Ethiopia, and Kenya.

Growth in Ethiopia is expected to reach 4.3% in 2022 and 6.5% in 2023, while Kenya’s economy is projected to expand by 4.7% and 5.1%, in 2022 and 2023, respectively.

Elsewhere, elevated commodity prices are expected to support near-term recovery across the region, with higher oil prices and the gradual easing of OPEC+ production cuts benefiting Nigeria and Angola.

Nigeria’s economy is projected to expand by 2.5 percent in 2022 and 2.8 percent in 2023, while Angola’s economy is projected to grow by 3 percent on average in 2022-23.

Growth in South Africa is forecast to moderate to its pre-pandemic trend, being held back by structural impediments and elevated levels of public debt.

Across the Sub-saharan region, the report says the pandemic has set back progress on poverty reduction and key development goals, reversing more than a decade of gains in per capita income in some countries.

“In over a third of the region’s economies, including Angola, Nigeria, and South Africa, per capita incomes are projected to remain lower in 2022 than a decade ago,” it says.

Recent Devts

In 2021, the output in Sub-Saharan Africa grew by an estimated 3.5 percent, driven by a rebound in commodity prices and an easing of social restrictions.

However, the recovery remains fragile and insufficient to reverse a pandemic-induced increase in poverty and the threat of recurrent COVID-19 outbreaks lingers, the world bank’s report claims.

The Omicron variant is now contributing to a surge in new cases across the SAA region where 70 percent of countries reported at least a 50 percent increase in new COVID-19 cases during the last two weeks of 2021.

“The services, tourism, and manufacturing sectors have been adversely affected by the pandemic, while sustained losses to incomes and employment, and elevated inflation have held back a recovery in consumer spending,” it says, adding rise in security related challenges restrained investment spending.

“Policy space to support recoveries has narrowed further across the region owing to increasing public debt levels and lost fiscal revenue,” it indicates.

Global Economy to Slow Down

The Bank’s latest forecast predicts global growth will slow to 4.1% this year from 5.5% in 2021, attributing it to virus threats, government aid unwinding and an initial rebound in demand fading.

However, economic activity in all advanced economies, such as the US, Euro area and Japan, is likely to have recovered from the hit it took during the pandemic by 2023, the bank says.

But output in developing and emerging countries is expected to remain 4% lower than it was before Covid struck.

Officials of the World Bank blamed stimulus programs in the richest countries for worsening the divide by driving global inflation.

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