Africa: A 4% growth rate in 2023, outpacing IMF’s global forecast — AfDB report

The African Development Bank predicts the continent’s growth will be stronger-than-expected at 4% this year. Its cautiously optimistic economic outlook is partly based on the expectation that China will continue to re-open after three years of strict Covid-19 policies

“Despite the confluence of multiple shocks, growth across all five African regions was positive in 2022- and the outlook for 2023–24 is projected to be stable,” AfDB chief economist Kevin Chika Urama said at the launch of the ‘2023 Africa’s Macroeconomic Performance and Outlook’ report. Africa’s GDP slowed to 3.8% in 2022 from 4.8% in 2021, and Urama predicts it will stabilize at 4% over 2023–24. China’s ending of strict Covid-19 curbs is expected to be one of the major factors contributing to the cautiously optimistic economic outlook that forecast a risk of a continent-wide recession close to zero.

The AfDB is more positive than the IMF – which announced a 3.7% growth for the continent this year in its Regional Economic Outlook published in October. Speaking during the report’s launch event, US economist Jeffrey Sachs backed the AFDB’s optimistic outlook. “I do strongly believe that Africa can and will rise to the growth of 7% or more per year consistently in the coming decades,” Sachs said. “Building on the resiliency that we see in this report, we are going to see in the next decade a real acceleration of Africa’s sustainable development so that it will be the fastest growing part of the world economy,” he says. The cautious optimism was, however, balanced by a frank assessment of the prevailing economic challenges, notably tightened global financial conditions, increased volatility in global financial markets, persistent disruptions in global supply chains, and inflation that increased to 13.8% in 2022 from 12.9% in 2021.