The African Development Bank (ADB) expects 18 countries, including Mozambique and Cape Verde, to see economic growth of over 5 percent this year, with the outlook for the continent standing at 4 percent, according to estimates presented Wednesday.
In the “African Economic Prospects” document, released during the annual meetings of the ADB Group in Egypt, the bank noted a recovery in growth of the African continent’s economy this year, to 4 percent, and further consolidation to 4.3 percent in 2024.
“Our projections show that 18 African countries will have growth rates [of their Gross Domestic Product, or GDP} of more than 5 percent in 2023, a number that is expected to increase to 22 in 2024,” the document, presented by governors and economists from the bank at a high-level plenary session during the annual meetings, said.
Among the countries with expected GDP growth of over 5 percent are Mozambique, with a projection of 6.6 percent and Cape Verde, with 6 percent, while Guinea Bissau is very close behind with 4.9 percent, for Angola the estimate is 3.7 percent and for Sao Tome and Principe 1.8 percent.
This recovery of African economic growth comes after real GDP growth was estimated at 3.8 percent in 2022, down from 4.8 percent in 2021, “due to multiple and dynamic shocks,” which “weighed on Africa’s growth momentum.
Despite this, GDP growth in 2022 is above the global average of 3.4%, and all but two African countries recorded positive growth rates.
“This also demonstrates remarkable resilience, evident in the projected consolidation of growth over the medium term,” the AfDB argues in its macroeconomic outlook.
This continued resilience, the institution believes, will be reinforced by expected improvements in the world economy, fuelled by the reopening of China and a downward adjustment of interest rates, as monetary policy tightening on inflation begins to bear fruit.
Growth will depend on the economic characteristics of each country, with the rise in oil exports promising that producing countries will benefit from the prices of this raw material, which, despite the recent decline, remain high.
The non-resource intensive economies will benefit from their more diversified economic structures, stresses the ADB, underlining the importance of diversification to resist shocks.
Of the various risks to economic performance facing Africa, the ADB highlights externally the tightening of global financial conditions and the appreciation of the US dollar, which “exacerbates debt servicing costs and may increase the risk of indebtedness” and Russia’s prolonged invasion of Ukraine.
Domestically, it points to the food insecurity and cost of living situation in Africa, in addition to climate change, which “continues to threaten lives, livelihoods and economic activities”.
The annual meetings of the African Development Bank Group began Monday and run until Friday in Sharm el Sheikh, Egypt, with the theme at the multiple working sessions being “Mobilising private sector finance for climate and green growth in Africa”.