The World Bank has revised its forecast for sub-Saharan Africa’s economic growth in 2023, lowering it from 3.4% to 3%. This adjustment is largely due to the civil war in Sudan, which has severely impacted the country’s economy.
Despite the downgrade, the region’s growth is still expected to surpass last year’s 2.4%, driven by increased consumer and business spending, according to the World Bank’s “Africa’s Pulse” report.
Andrew Dabalen, the World Bank’s chief economist for Africa, noted that while the region’s recovery remains slow, inflation is easing in many countries, which could allow governments to lower high interest rates. However, the report warns that growth remains vulnerable to conflicts and natural disasters like droughts and floods. Without the war in Sudan, next year’s growth could have been 0.5% higher.
South Africa, the region’s most developed economy, is projected to grow by 1.1% this year, with growth expected to reach 1.6% by 2025. Nigeria’s economy is forecast to grow by 3.3% this year, increasing to 3.6% in 2025. Kenya is expected to see 5% growth in 2023.
Sub-Saharan Africa experienced strong growth between 2000 and 2014, averaging 5.3%, but this momentum slowed after a drop in commodity prices, compounded by the COVID-19 pandemic.
Many countries in the region are now grappling with high levels of debt, which hampers their ability to invest in economic recovery. Dabalen warned that if this trend continues, it could have dire consequences. He emphasized the need for increased investment to accelerate recovery and reduce poverty.
Debt remains a major issue, particularly in countries like Kenya, which saw violent protests earlier this year in response to higher taxes. Governments in the region have been borrowing at higher interest rates instead of securing cheaper loans, resulting in substantial debt repayment burdens.