'Resilient' Africa set for growth rebound: ADB

'Resilient' Africa set for growth rebound: ADB

Akinwumi Adesina, president of the African Development Bank, said inflationary pressures on the continent remain 'entrenched'
Akinwumi Adesina, president of the African Development Bank, said inflationary pressures on the continent remain 'entrenched'. Photo: Nipah Dennis / AFP/File
Source: AFP

Africa saw the pace of economic growth sag last year as inflation continued to rise but is set to rebound this year, the African Development Bank said Friday.

In its latest report on the state of the continent's economy, the ADB said that Africa had yet to benefit from falling inflation seen in other parts of the world.

Instead, average inflation increased by 3.6 percentage points, to 17.8 percent last year, the highest rate in a decade.

"Inflationary pressures in Africa remain entrenched and have eroded people’s purchasing power and adversely affected livelihoods," the bank's president, Akinwumi Adesina, said in his introduction to the report.

High global interest rates and the depreciation of many African currencies versus the US dollar have also increased debt service costs, constraining investment needed to boost growth and social spending.

Read also

IEA warns on plummeting oil stocks

While economic growth slowed to 3.2 percent last year, from 4.1 percent in 2022, according to the ADB's calculations, this still makes it the world's second-fastest-growing region after Asia.

The ADB noted that 15 African countries posted growth rates of higher than five percent thanks to higher investment spending, a recovery in tourism and a strong performance by the mining sector.

"Despite the growth slowdown in 2023, the continent’s economies remain resilient, with growth in 2024 projected to rise to 3.8 percent," the ABD said in its report.

The projected higher growth reflects efforts to diversify economies and boost consumer consumption, it said.

And while the ADB said it expects medium-term growth prospects to improve, it said risks remain tilted to the downside, reflecting both global and regional uncertainty.

"Africa’s economic growth is forecast to rebound if the global economy remains resilient, the implementation of infrastructure projects on the continent begins to yield dividends and progress on debt restructuring and fiscal consolidation in countries facing heightened debt challenges is sustained," it said.

Read also

EU cuts eurozone inflation, growth forecasts for 2024

But if inflation remains persistent on the continent, possibly due to conflicts sending prices higher again, it could erode any gains, it warned.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.