Public Management

Dark clouds gather over Africa’s economy (AfDB)

Dark clouds gather over Africa’s economy (AfDB)
Thursday, 26 May 2022 16:40

According to the AfDB, Africa needs an additional US$432 billion to finance its recovery at a time when budgetary margins have been severely squeezed and growth prospects jeopardized by the war in Ukraine and ever-pressing climate challenges. For President Akinwumi Adesina, the continent needs to act now. 

Africa “risks sliding into stagflation —a combination of slow growth and high inflation. Real GDP is projected to grow by 4.1 percent in 2022, markedly lower than the near 7 percent in 2021.” Those outlooks are presented by the African Development Bank (AfDB) in its 2022 African Economic Outlook. 

For the development bank’s experts, the Russia-Ukraine conflict exacerbated the already devastating effects of the continuing Covid-19 pandemic, therefore dampening previously promising outlooks. 

"Macroeconomic fundamentals have generally improved, but considerable challenges remain in the medium term, due largely to persistence of the pandemic effects and volatility induced by the impact of the Russia–Ukraine conflict," notes Chief Economist and Acting Vice President Kevin Urama, who presented the report.

On the one hand, although the debt ratio is expected to stabilize, it remains high (above 70%) and more countries are getting into the category of over-indebted nations.  On the other hand, inflation needs to be taken into account, says Kevin Urama. 

"Average inflation is projected to accelerate to 13.5 percent in 2022 from 13.0 percent in 2021, fueled by a sharp rise in commodity prices, especially energy and food, due to escalation of the Russia–Ukraine conflict," the economic outlook stressed. 

“Africa will need at least $432 billion to address the effects of Covid-19 on its economies and on the lives of its people — resources it does not have,” said President Akinwumi Adesina in his opening address during the AfDB 2022 annual meetings. 

The coronavirus pandemic already added more than 30 million Africans to the list of extremely poor individuals. It also pushed 22 million people into unemployment. The lingering impacts of the economic disruption resulting from the Russia-Ukraine conflict could push an additional 1.8 million Africans into extreme poverty this year and 2.1 million in 2023. 

This is a bleak picture, given that the most affected groups are women and men operating in the informal sector. If the Russian-Ukrainian conflict persists, Africa’s growth could stagnate at around 4% in 2023, the AfDB projects. 

During its 2022 annual meetings, the development bank called on the international community to keep up with its commitments like the one to provide US$100 billion to fund climate actions in developing countries. 

"Africa will need more than a decade to catch up to pre-COVID-19 and pre-Russia–Ukraine conflict extreme poverty rates," stressed Akinwumi Adesina pointing at the climate challenges the continent will face. Those challenges could exacerbate social tensions, he added. 

"Climate change is already threatening to derail development gains and impose further economic costs and social disruption," the economic outlook explains.  

Fiacre E. Kakpo

Additional Info

  • communiques: Non
  • couleur: N/A
On the same topic
• The IMF has approved an immediate disbursement of $367 million to Ghana, bringing the total financial support provided to the country since May...
Zenith Bank is in advanced talks to acquire a tier-two bank in Kenya. The Central Bank of Kenya has raised capital requirements, triggering market...
• DPI acquires minority stake in Egypt’s largest private hospital group• Funds to support expansion across Egypt and key Gulf countries• Investment among...
WAEMU states collectively raised nearly 7,000 billion CFA francs in the first half of 2025, a record amount driven by increased financing needs, the...
Most Read
01

• Global coffee consumption projected to hit a record 169.4 million 60-kg bags in 2025/2026, up from...

Coffee: Global Consumption Expected to Reach Record Level in 2025/2026
02

• Investors seem to keep focusing on yields, which are high for the moment• New Leadership might see...

Afreximbank Bonds Retain Market Confidence Despite Moody’s Downgrade
03

• Algeria grants commercial 5G licenses to top three telecom operators: Mobilis, Djezzy, and Ooredoo...

Algeria Awards Commercial 5G Licenses
04

• ECOWAS Bank funds 47.7-km stretch of strategic 700-km road project• Lagos-Calabar highway seen boo...

Nigeria Secures $100 mln ECOWAS Bank Loan for Lagos-Calabar Coastal Highway
05

• IFC teams up with AfDB and Nigeria’s EbonyLife to assess a new fund for African cinema• Sector cou...

IFC Plans Investment Fund to Help Grow African Film Industry
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72
Média kit : Download

EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.