Freetown, SIERRA LEONE – The African Development Bank (AfDB) has revised its short to medium-term macroeconomic forecast for Africa, anticipating a growth rate of 3.4% in 2023 and 3.8% in 2024, down from the previous projections of 4.0% and 4.3%. The updated data, disclosed in the 2023 Africa’s Macroeconomic Performance and Outlook (MEO) update on Thursday, 29 November, reflects persistent challenges including the long-term effects of COVID-19, geopolitical tensions, conflicts, climate shocks, a global economic slowdown, and limited fiscal capacity for African governments to respond adequately to shocks.
Inflationary pressures remain a concern for the continent, with the Bank projecting an average inflation rate of 18.5% in 2023 and 17.1% in 2024. The Bank’s Chief Economist and Vice President, Prof. Kevin Urama, highlighted the global economic challenges and shocks shaping Africa’s macroeconomic performance. He expressed concerns about entrenched inflationary pressures that could reverse gains made since the pandemic, along with the ongoing depreciation of domestic currencies increasing debt service costs.
Prof. Urama stated, “In the face of regional and global shocks, the Bank remains resolute in supporting African countries to better navigate these challenges and put economic growth back on track.” The MEO update encourages short-term measures, emphasizing the need for countries to implement restrictive monetary policies to contain inflation. This should be complemented by fiscal policies promoting economic diversification and removing supply-side constraints.
For the medium- to long-term, the report urges governments to scale up efficient investments in human capital and physical infrastructure, aiming to boost productivity, regain economic growth momentum, and foster inclusive and sustainable development.
Launched in January 2023, the Africa’s Macroeconomic Performance and Outlook report complements the AfDB’s annual African Economic Outlook report, addressing key emerging policy issues relevant to the continent’s development. The MEO is published quarterly, with the update preceding the 2024 edition, which will delve into the evolution of macroeconomic conditions in the face of multiple and unprecedented shocks. ZIJ/4/12/2023