The African Development Bank (AfDB) stated that the continent’s economic outlook for 2023 appears “solid” while urging “strong policy initiatives” to counteract the effects of growing inflation and moderate growth.
The regional bank examined growth prospects of African countries on a case-by-case basis in its 2023 Africa’s Macroeconomic Performance and Outlook, even though the average growth decreased from 4.8 to 3.8 percent at the end of last year.
This year, the growth is predicted to increase to 4% before dipping to 3.9% by 2024.
In Nigeria, the African Development Bank predicted that growth will average 3.2% from 2023 through the following year, while the alarming inflation rate—which ended the previous year at 21.24 percent—is anticipated to drop to 14.6%.
Nigeria’s growth prospects are less favorable than the average growth forecasts for West Africa, which range between 4.1% and 4.3% for 2023. (2024).
The African Development Bank’s forecast for Nigeria’s output is in line with Dr. Biodun Adedipe, Chief Consultant of B. Adedipe Associates Limited, although it is lower than the World Bank’s forecast of 2.9%.
East Africa is expected to grow at the fastest rate in the sub-region over the next two years, at 5% through 5.4%. In 2023 and 2024, respectively, growth rates of 2.3% and 2.8% are predicted for the Southern African economy.
Aside from the eastern sub-region, the African economy saw negative growth in 2020 as a result of COVID-19’s distortionary effects, but it experienced a significant recovery in 2021.
Although the whole data for last year is not yet available, geopolitical concerns, high inflation, and the related tight monetary environment were generally thought to have slowed development.
“Growth is estimated to have slowed to 3.6 per cent in 2022 from 4.4 per cent in 2021, reflecting decelerations in Côte d’Ivoire and Nigeria, the region’s two large economies.”
“Though hit by the COVID-19 pandemic, insecurity, and weak oil production (despite higher international oil prices), Nigeria could benefit in 2023 from ongoing efforts to restore security in the restive oil-producing region.”
“A peaceful political transition following the 2023 elections could further boost investor confidence. Nigeria’s recovery in 2023 could help raise West Africa’s average growth to more than four per cent in the medium term,” said the report.
It was stated that the GDP of oil-exporting nations, which makes up approximately 51% of the continent’s total GDP, may decline somewhat to 4% last year from 4.2% in 2021.
“This was due to a sharp growth deceleration in Libya and subdued growth in Nigeria, the group’s largest economies. Their growth is projected to stabilise at 4.1 per cent in 2023 thanks to the expected reduction in political risks in Libya and the projected improvement in oil production in Nigeria, as prices remain elevated relative to the downturn during the pandemic,” it pointed out.
