Africa’s GDP growth to slowdown in 2022

THE African Development Bank (AfDB) projects that Africa’s gross domestic product growth rate will dip to 4,1 percent this year weighed down by the impact of Covid-19 pandemic and concerns around the ongoing Russia-Ukraine war.

Africa’s gross domestic product (GDP) grew by an estimated 6,9 percent last year recovering from a pandemic-induced contraction of 1,6 percent in 2020.

Rising oil prices and global demand have generally helped improve Africa’s macroeconomic fundamentals.

Zimbabwe though, Finance and Economic Development Minister Mthuli Ncube says, is still convinced it will post 5,5 percent growth, from estimated 7,8 percent in 2021, despite the headwinds posed by the war in Ukraine and a cocktail of domestic factors. In its 2022 African Economic Outlook released Wednesday this week, AfDB said: “Africa’s GDP has recovered strongly in the last year, but the lingering effects of the Covid-19 pandemic, Russia’s invasion of Ukraine and the ensuing war could pose considerable
challenges in the medium term.

“Growth could decelerate to 4,1 percent in 2022, and remain stuck there in 2023, because of the lingering pandemic and inflationary pressures caused by the Russia-Ukraine war. The two Eastern-European countries are major grain suppliers to Africa. The theme of the 2022 African Economic Outlook is “Supporting Climate Resilience and a Just Energy Transition in Africa.”

It highlights a growing threat to lives and livelihoods in Africa.

AfDB has responded to the likelihood of a looming food crisis with a US$1,5 billion African Emergency Food Production Facility approved by the group’s executive board last week.
   
The bank’s president, Dr Akinwumi Adesina said international efforts including those of his institution, the G20 Common Framework for Debt Treatment, and the $650 billion in Special Drawing Rights issued by the International Monetary Fund, are supporting the continent’s recovery.

However, Dr Adesina said the recovery will still be costly. “Africa will need at least US$432 billion to address the effects of Covid-19 on its economies and on the lives of its people — resources it does not have,” he said.

AfDB acting chief economist and vice president Kevin Urama was quoted as saying: “Climate change is the most existential challenge to Africa’s development today. Finding policies that address climate adaptation and mitigation of greenhouse gas emissions while ensuring social and economic development is one of the most enduring policy challenges of our time.

“The African Economic Outlook report 2022 provides evidence-based policy options for driving inclusive growth by building climate resilience and a just energy transition in Africa.”

Meanwhile, around 30 million people in Africa were pushed into extreme poverty in 2021 and about 22 million jobs were lost in the same year because of the pandemic. And the trend is expected to continue through this second half of 2022 and on into 2023.

“The economic disruptions stemming from the Russia-Ukraine war could push a further 1,8 million people across the African continent into extreme poverty in 2022. That number could swell with another 2,1 million in 2023.

“The continent’s additional financing needs for 2020-22 are estimated at US$432 billion,” said AfDB.-The Herald