Africa is set to be the second-fastest growing region in the world after Asia in 2023-24, demonstrating the resilience of its economy despite dealing with multiple global shocks.
But the projected growth will depend on global conditions and the continent’s ability to bolster its economic resilience, the African Development Bank or AfDB’s 2023 African Economic Outlook report has found.
The report, launched on Wednesday, forecasts that Africa will consolidate its post-Covid-19 pandemic recovery to 4.3% GDP growth in 2024 from 3.8% in 2022.
Some 22 countries will record growth rates above 5%, it says.
It recommends robust policy actions, including incentivizing green industries and providing guarantees at scale to de-risk private sector investments in managing natural capital across the continent.
The Bank Group’s Chief Economist and Vice President, Prof. Kevin Urama, presented the report’s findings, outlining several potential policy actions for stimulating more private sector financing for climate and green growth in Africa.
These options include tapping into the expanding global and domestic private equity and venture capital appetite for African markets and “cautiously engaging with the emerging carbon markets and debt-for-climate swaps,” Urama said.
Unveiling the 220-page report, AfDB Group President Akinwumi Adesina said African countries must do more, including mobilizing more domestic resources and restructuring debt to withstand global headwinds.
“African economies are moving in the right direction,” Adesina said.
He also noted that five of the six pre-pandemic top-performing economies are set to be back in the league of the world’s 10 fastest-growing economies in 2023/24.
“But as we gather today, the world is facing multiple challenges, including climate change, inflation driven by higher prices of energy, commodities, and disruption of supply chains due to the ongoing Russia-Ukraine war,” he said.
The bank chief also pointed out that monetary tightening in the United States and Europe has led to rising interest rates that have compounded debt service payments for African countries..