Economy
THE real Gross Domestic Product (GDP) growth for Africa is expected to average 3.8 per cent and 4.2 per cent in 2024 and 2025, the African Development Bank (AfDB) has said.
In its latest Macroeconomic Performance and Outlook (MEO) report, the bank said the growth figure is higher than the projected global averages of 2.9 per cent and 3.2 per cent, putting the continent as the second-fastest-growing region after Asia.
The report said: “The top 11 African countries projected to experience strong economic performance forecast are Niger (11.2 per cent); Senegal (8.2 per cent); Libya (7.9 per cent) and Rwanda (7.2 per cent).
“Others are Cote d’Ivoire (6.8 per cent), Ethiopia (6.7 per cent); Benin 6.4 per cent); Djibouti (6.2 per cent); Tanzania (6.1 per cent); Togo and Uganda (six per cent) respectively.”
AfDB’s President, Dr. Akinwumi Adesina, explained that despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than five per cent.
Adesina called for larger pools of financing and several policy interventions to boost Africa’s growth further.
The MEO report provides an up-to-date evidence-based assessment of the continent’s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments.
Adesina said the latest report called for cautious optimism given the challenges posed by global and regional risks. He listed the risks to include rising geo-political tensions, increased regional conflicts, and political instability all of which could disrupt trade and investment flows, and perpetuate inflationary pressures.
According to the AfDB boss, fiscal deficits have improved – faster-than-expected – and recovery from the pandemic helped shore up revenue.
“This has led to a stabilisation of the average fiscal deficit at 4.9 per cent in 2023, like 2022, but significantly less than the 6.9 per cent average fiscal deficit of 2020.
“The stabilisation is also due to the fiscal consolidation measures, especially in countries with elevated risks of debt distress.”
The AfDB boss said that with the cloud of uncertainty over global economy, the fiscal positions of the African continent would continue to be vulnerable to global shocks.
“The report shows that the medium-term growth outlook for the continent’s five regions is slowly improving, a pointer to the continued resilience of Africa’s economies,” he said.
Presenting the report, the AfDB’s Chief Economist and Vice President, Prof. Kevin Urama said growth in Africa’s top-performing economies had benefitted from a range of factors.
Urama said the factors include declining commodity dependence through economic diversification, increasing strategic investment in key growth sectors, rising both public and private consumption, and positive developments in key export markets.
“Africa’s economic growth is projected to regain moderate strength as long as the global economy remains resilient, disinflation continues, investment in infrastructure projects remains buoyant, and progress is sustained on debt restructuring and fiscal consolidation,” he said.AfDB’s Vice-President in charge of regional development, integration, and execution of activities, Mrs. Marie-Laure Akin-Olugbade, disclosed this at the official signing of the Memorandum of Understanding (MoU) for Cooperation between the AfDB Group and the LCBC.
The MoU was signed on the sidelines of the 37th Summit of Heads of State and Governments of African Union Commission in Addis-Ababa.
She said: “The MoU involves transforming the living conditions of the 50 million people living in the six member countries of the LCBC.
“They include the Chad, Nigeria, Cameroon, Niger, the Central African Republic, and Libya. This will also have a positive impact on the ecosystem of the Lake Chad watershed.”
Lake Chad, once considered the sixth largest inland body of water in the world, covering an area of 25,000 km2, began to shrink dramatically in the 1970s.
By the 1980s, its area had fallen to less than 2,000 km2. This represents a reduction of 92 per cent between 10 and 15 years, with its decline traced to various factors.
According to Akin-Olugbade, climate change and variability have played an important role. Droughts and extremely low rainfall levels have been a constant feature.
He said: “Population growth is another factor, exacerbating pressure on the basin’s natural resources. Since the 1960s, the population of the Chad Basin has quadrupled, and we predict a further doubling by 2050.
“Lake Chad now supports the livelihoods of approximately two million people along its shores and contributes to the food security for about 50 million people in the river basin.”
According to Akin-Olugbade, the inclusion of the Democratic Republic of Congo and the Republic of Congo in the MoU, is a great example of the needed collective action.
She said: “The two countries are not currently members of the LCBC, but are significant potential contributors in terms of water resources.
“They are part of the ecosystem that dictates the fate of the Lake Chad basin. As the main financial partner of the LCBC for several years, the AfDB has supported investment projects in the basin, totaling more than $241 million.”
Amb. Mamman Nuhu, the Executive-Secretary of Lake Chad Basin Commission, thanked the bank for its continued support to the member states of the LCBC.
According to Nuhu, the AfDB has remained the LCBC’s biggest funding partner over the past 20 years.
THE NATION
19th February, 2024.
C.E.
Tags: AfDB
