The World Bank has lowered its prediction for sub-Saharan Africa’s economic growth this year to 3%, down from 3.4%. The main reason for this drop is the civil war in Sudan, which has badly hurt the country’s economy.
However, the region is still expected to grow more than last year’s 2.4%, thanks to increased spending by people and businesses. The report, called “Africa’s Pulse,” explains this outlook.
Andrew Dabalen, the World Bank’s chief economist for Africa, said the region’s recovery is slow, but inflation is going down in many countries. This means governments might be able to reduce high interest rates.
The report also points out that growth is at risk due to conflicts and natural disasters like droughts and floods. Without the war in Sudan, the region’s growth next year could have been 0.5% higher.
South Africa, the region’s most developed country, is expected to grow by 1.1% this year and 1.6% by 2025. Nigeria’s economy is predicted to grow by 3.3% this year, rising to 3.6% in 2025. Kenya is expected to grow by 5% this year.
Between 2000 and 2014, sub-Saharan Africa grew strongly at an average of 5.3%, but this slowed down when commodity prices dropped, and the COVID-19 pandemic worsened things.
Many countries in the region are struggling with high debt, making it hard for them to invest in their economies. Dabalen warned that if this continues, it could be disastrous. He said Africa needs a lot more investment to recover faster and reduce poverty.
Debt is a major problem, especially in countries like Kenya, which had violent protests earlier this year over higher taxes. Governments have been borrowing money at higher interest rates instead of getting cheaper loans, leading to large debt payments.
Source: Africanews
