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 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 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 percent in 2021 to 3.8 percent in 2022.
The biggest slowdown was in southern Africa, dragged down by economic powerhouse South Africa’s energy crisis, and weak domestic demand.
China’s re-opening after strict Covid policies is expected to boost growth across the continent, estimated at around four percent this year and in 2024.
Central Africa is forecast to see the fastest growth, bolstered by favorable commodity prices.
Inflation in Africa increased from 12.9 percent in 2012 to 13.8 percent in 2022, “the highest in more than a decade.”
Price hikes were the most brutal in East Africa, which experienced 25.3 percent inflation.
The country with the worst numbers was Zimbabwe, where inflation hit 285 percent up from 98.5 percent 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 percent in 2023.
A further drop to 8.8 percent 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.