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Nairobi, Kenya | Xinhua | The World Bank on Tuesday forecasted the sub-Saharan Africa (SSA) economy to slow to 3.6 percent in 2023 and rise to 3.9 percent in 2024.
According to the World Bank’s latest Global Economic Prospects report, the growth was revised down for almost 60 percent of countries, including downward revisions for more than 70 percent of metal exporters which are expected to be affected by the further easing of global metal prices.
“SSA food systems, already stressed by elevated costs of farming inputs and weather-induced production losses, remain particularly vulnerable to further disruptions that could lead to surging food prices and increased food insecurity,” the report says.
The World Bank said that even as the cost of living pressures are anticipated to moderate, the negative impact of persistent poverty and food insecurity on growth, amplified by other vulnerabilities, such as unfavorable weather, high debt, policy uncertainty, and violence and conflict is anticipated to keep the pace of recoveries subdued in many countries.
This growth slowdown represents a formidable challenge for economic development in SSA, it warned.
The World Bank said the growth softened markedly in 2022 to 3.4 percent as sharp cost-of-living increases together with weak external demand and tighter global financial conditions tempered post-pandemic recoveries in many countries.
It said food price pressures, already significant even before the pandemic, have intensified further because of adverse weather shocks, supply disruptions worsened by Russia’s conflict with Ukraine, increased fragility and insecurity, and, in some countries, large currency depreciations.
The lender warns that a deeper-than-anticipated slowdown of the global economy could cause sharp declines in global commodity prices dampening growth in SSA exporters of oil and industrial metals.
“Global financial conditions could tighten more if global inflation pressures persist longer-than-expected leading to higher borrowing costs and a higher risk of debt distress in many SSA economies,” the World Bank said.
The report says policymakers in small states can improve long-term growth prospects by bolstering resilience to climate change, fostering effective economic diversification, and improving government efficiency. The Bank also called upon the global community to assist small states by maintaining the flow of official assistance to support climate-change adaptation and help restore debt sustainability.
