The World Bank reduced its forecast for sub-Saharan Africa’s GDP growth this year from 3.4% to 3%. The Sudanese civil war, which has severely damaged the nation’s economy, is the primary cause of this decline.
However, because of higher consumer and business expenditure, the region is still predicted to develop faster than the 2.4% growth of the previous year. The “Africa’s Pulse” study provides an explanation of this outlook.
Although the region’s recovery is sluggish, several nations are seeing a decline in inflation, according to Andrew Dabalen, the top economist for the World Bank in Africa. This suggests that high interest rates may be able to be reduced by governments.
The research also emphasizes how natural disasters like floods and droughts, as well as wars, pose a threat to progress. In the absence of the war in Sudan, the region’s growth next year could have been 0.5% higher.
The most developed nation in the region, South Africa, is predicted to increase by 1.1% this year and 1.6% by 2025. It is anticipated that Nigeria’s GDP would expand by 3.3% this year and 3.6% in 2025. This year, Kenya is predicted to expand by 5%.
Sub-Saharan Africa saw rapid growth between 2000 and 2014, averaging 5.3%; however, this slowed down as commodity prices fell, and the COVID-19 pandemic made matters worse.
The high levels of debt in many of the region’s nations make it difficult for them to make economic investments. Dabalen cautioned that things can turn out worse if this keeps up. To alleviate poverty and recover more quickly, he argued, Africa requires a lot more investment.
Debt is a significant issue, particularly in nations like Kenya, which had violent protests earlier this year over higher taxes. Governments have been borrowing money at higher interest rates instead of getting cheaper loans, leading to large debt payments.
(Africanews)
