According to the International Monetary Fund (IMF), economic growth in Sub-Saharan Africa (SSA) would remain low in 2023, at 3.8%. This is according to the IMF’s latest World Economic Outlook (WEO) Update Report for January 2023, which was released on Tuesday.
According to the research, the sluggish growth is due to the lengthy impact from the COVID-19 pandemic, although with a minor upward adjustment since October 2022, before increasing up to 4.1 percent in 2024.
“The small upward revision for 2023 of 0.1 percentage point reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector.
“In South Africa, by contrast, after a COVID-19 reopening rebound in 2022, projected growth more than halves in 2023, to 1.2 per cent.
“This reflects weaker external demand, power shortages, and structural constraints to decline to 3.6 per cent in 2022 as against 4.7 per cent recorded in 2021.”
According to the research, global growth would dip from an expected 3.4 percent in 2022 to 2.9 percent in 2023, then increase to 3.1 percent in 2024. It said that the prediction for 2023 was 0.2 percentage point higher than forecasted in the October 2022 WEO but lower than the historical (2000-19) average of 3.8%.
According to the research, the hike in Central Bank rates to combat inflation, as well as Russia’s involvement in Ukraine, continue to impact on economic activity. According to the report, the quick spread of COVID-19 in China slowed growth in 2022, but the recent reopening has opened the path for a faster-than-expected rebound.
The report said Global inflation is expected to fall from 8.8 per cent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 per cent. It said in most economies, amid the cost-of-living crisis, the priority remained achieving sustained disinflation.
“With tighter monetary conditions and lower growth potentially affecting financial and debt stability, it is necessary to deploy macro-prudential tools and strengthen debt restructuring frameworks.
” Accelerating COVID-19 vaccinations in China would safeguard the recovery, with positive cross-border spillovers. “Fiscal support should be better targeted at those most affected by elevated food and energy prices, and broad-based fiscal relief measures should be withdrawn.”
The report said stronger multilateral cooperation was essential to preserve the gains from the rules-based multilateral system and mitigate climate change by limiting emissions and raising green investment.
