The institution notes that the regional growth decline this year reflects worsening weather shocks, coupled with a slowing global economy, and domestic supply issues, particularly in the electricity sector.

The average economic growth of Sub-Saharan African countries is expected to fall to 3.3% in 2023, down from 4% in 2022 before reaching 4% in 2024, according to the International Monetary Fund (IMF).

The new estimates released yesterday with the updated World Economic Outlook are lower than those announced in July when the IMF indicated the region would experience growth of 3.5% in 2023 and 4.1% in 2024. The anticipated drop in growth compared to 2022 reflects worsening weather shocks, the slowing global economy, and domestic supply issues, particularly in the electricity sector, explains the IMF.

In Nigeria, economic growth is expected to drop from 3.3% in 2022 to 2.9% in 2023 before reaching 3.1% in 2024. For the largest African economy, the 2023 forecasts have been reduced by 0.3 percentage points compared to those in July, reflecting lower-than-expected oil and gas production and an increase in inflation following fuel subsidy removal and naira devaluation.

In South Africa, growth is expected to drop from 1.9% in 2022 to 0.9% in 2023, mainly due to the energy crisis affecting the country. However, these new forecasts are 0.6 percentage points higher than the Fund's previous estimates from last July, as electricity shortages have eased in Q2 2023. Angola's growth forecasts for 2023 have been sharply reduced from 3.5% to 1.3%.

The IMF also noted that Kenya's economy is expected to accelerate to 5% in 2023 from 4.8% in 2022, despite the government's budget cuts due to rising debt service costs. Tanzania and Senegal are also expected to record higher growth rates this year.

Average annual inflation in SSA is expected to reach 16.2% by the end of the year, nearly the same rate as at the end of 2022, before declining next year to 10.5%