The World Bank said rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy are dragging down growth prospects in Sub-Saharan Africa(SSA).
This is contained in a statement issued by the World Bank on the latest World Bank Africa’s Pulse Report for SSA released on Wednesday.
The report said the economic outlook for SSA remained bleak amid an elusive growth recovery.
It said economic growth in SSA was forecast to decelerate to 2.5 per cent in 2023, from 3.6 per cent in 2022.
“South Africa’s Gross Domestic Product is expected to only grow by 0.5 per cent in 2023 as energy and transportation bottlenecks continue to bite.
“Nigeria and Angola are projected to grow at 2.9 per cent and 1.3 per cent respectively, due to lower international prices and currency pressures affecting oil and non-oil activity.”
The report said increased conflict and violence in the region weighed on economic activity, and the rising fragility may be exacerbated by climatic shocks.
“In Sudan, economic activity is expected to contract by 12 per cent because of the internal conflict which is halting production, destroying human capital, and crippling state capacity. ”
It stated that in per capita terms, growth in SSA had not increased since 2015.
“The region is projected to contract at an annual average rate per capita of 0.1 per cent over 2015-2025, thus potentially marking a lost decade of growth in the aftermath of the 2014-15 plunge in commodity prices,” it stated.
The statement quoted Andrew Dabalen, World Bank Chief Economist for Africa as saying, “The region’s poorest and most vulnerable people continue to bear the economic brunt of this slowdown, as weak growth translates into slow poverty reduction and poor job growth.
“With up to 12 million young Africans entering the labour market across the region each year, it has never been more urgent for policymakers to transform their economies and deliver growth to people through better jobs.”
The report said in spite of the gloomy outlook, there were a few bright spots.
It said inflation was expected to decline from 9.3 per cent in 2022 to 7.3 per cent in 2023 and fiscal balances were improving in African countries that were pursuing prudent and coordinated macroeconomic policies.
“In 2023, the Eastern African community is expected to grow by 4.9 per cent while the West African Economic and Monetary Union is set to grow by 5.1 per cent,” it added.
However, the report said debt distress remained widespread with 21 countries at high risk of external debt distress or in debt distress as of June 2023.
It said overall, current growth rates in the region were inadequate to create enough high-quality jobs to meet increases in the working-age population.
“Current growth patterns generate only three million formal jobs annually, thus leaving many young people underemployed and engaged in casual, piecemeal, and unstable work that does not make full use of their skills.”
The report said creating job opportunities for the youth would drive inclusive growth and turn the continent’s demographic wealth into an economic dividend.
The statement quoted Nicholas Woolley, World Bank Economist and contributor to the report as saying.
“The urgency of the jobs challenge in SSA is underscored by the huge opportunity from demographic transitions that we have seen in other regions.
“This will require an ecosystem that facilitates private-sector development and firm growth, as well as skill development that matches business demand.”
The report identified a set of policies to overcome hurdles and unleash job creation in SSA.
“Cost-effective private sector reforms focused on increasing competition, uniform policy enforcement across firm sizes, and regulatory alignment with regional trading partners.
“Governments can also help identify and support early-stage growth of businesses through more inclusive procurement practices and promotion of local businesses abroad.”
It said investment in education was necessary to boost semi-skilled occupations for the region.
“Interventions that improve learning in school are more effective than those increasing school attendance alone.
”Vocational education can be useful for addressing the underemployed and those who have missed out on education as children.”
The report said education of girls and access to jobs for women could reduce potential productivity loss from the misallocation of female labour.
“Cash transfers have proven effective in increasing girls’ school enrollment and attendance, as well as in curbing pregnancies among school-age girls.”(NAN) (www.nannews.ng)
