Abidjan – Despite slowing growth and the worst inflation figures in a decade in 2022, African economies remain “resilient”, and double-digit price hikes are expected to ease, an African Development Bank report said on Thursday.
Economies across Africa’s 54 nations were hard-hit by the global economic fallout of Russia’s invasion of Ukraine, as well as the impacts of climate change and aftershocks of the Covid pandemic.
A stronger dollar, inflation, and a slowdown in demand for exports to major trading partners in Europe and China, had “dire consequences” for the continent’s economies, said the ADB report.
“An estimated 15 million additional people were driven into extreme poverty in Africa due to higher global energy and food prices in 2022, exacerbating the increase in extreme poverty induced by the Covid-19 pandemic,” said the ADB.
Economic growth dropped from 4.8% in 2021 to 3.8% in 2022.
The biggest slowdown was in southern Africa, dragged down by economic powerhouse South Africa’s energy crisis, and weak domestic demand.
ALSO READ | Inflation bites into Sierra Leone’s all-important ‘cookeries’
China’s re-opening after strict Covid policies is expected to boost growth across the continent, estimated at around 4% this year and in 2024.
Central Africa is forecast to see the fastest growth, bolstered by favourable commodity prices.
Inflation in Africa increased from 12.9% in 2012 to 13.8% in 2022, “the highest in more than a decade”.
Price hikes were most brutal in East Africa, which experienced 25.3% inflation.
The country with the worst numbers was Zimbabwe, where inflation hit 285% up from 98.5% the previous year.
Across the continent, the tightening of monetary policy and an improvement in food supply will see inflation slowly ease to 13.5% in 2023.
A further drop to 8.8% is forecast for 2024, lower than pre-Covid levels.
The ADB said African economies “remain resilient with a stable outlook,” however “cautious optimism” was needed.
Follow African Insider on Facebook, Twitter and Instagram
For more African news, visit Africaninsider.com