2023-05-25 07:26:22
SHARM EL SHEIKH (EGYPT) – With a growth average which should stabilize at 4.1% in 2023-2024, i.e. more than the 3.8% estimated for 2022, African economies remain resilient in the face of the multiple shocks they face, in particular those related to the international geopolitical situation and impact of climate change, says the AfDB, prompting the continent to exploit its minerals to become the next hub of global green development.
In its report on the African Economic Outlook for 2023, released on Wednesday, on the sidelines of the 58th Annual Meetings of the African Development Bank Group, which are being held from May 22 to 26 in Sharm el Sheikh in Egypt, the AfDB argues that n North Africa, average growth is expected to increase to 4.6% in 2023 and then to 4.4% in 2024.
Growth forecasts are 4.9% in 2023 and 4.6% in 2024 for Central Africa, respectively 5.1% and 5.8% for East Africa, 1.6% and 2.7% for Southern Africa and finally 3.9% and 4.2% for West Africa.
The report stresses, however, that Africa still faces several downside risks to its growth prospects that warrant “cautious optimism”.
Inflation on the continent should rise from 14.2% in 2022 to 15.1% in 2023, before falling to 9.5% in 2024, according to the AfDB, which recommends that countries African countries “a clearly communicated anti-inflationary monetary policy, backed by prudent fiscal policy, to reduce inflation more quickly and at lower cost”.
With regard to public debt, which is expected to remain high, with persistent vulnerabilities and a debt-to-GDP ratio of 66% in 2023, the AfDB recommends in the short term “a coordinated debt treatment strategy between official creditors and to avoid a debt crisis, given the tightening of global financial conditions and the accumulation of debt service payments”.
And in response to the continent’s growing financing needs, the AfDB’s African Economic Outlook (AEO) explores the potential roles of the private sector in financing climate action and green growth ambitions.
Putting the continent’s natural wealth at the service of green development
Between 2600 and 2800 billion dollars are needed for the period 2020-2030 to implement Africa’s climate commitments, to which are added, according to United Nations estimates, 1300 billion dollars/year to achieve the sustainable development (SDGs), underlines the report.
Read also: AfDB meetings: the necessary “reshaping” of the global financial architecture for the benefit of sustainable development in Africa under debate
Thus, the AfDB strongly advocates for private sector financing by identifying investment opportunities in different sectors, identifying barriers and risks to such investments, and discussing innovative financing instruments and policy and regulatory pathways to to attract private financing.
Furthermore, the report calls on countries on the continent to harness Africa’s vital minerals to become the next hub of global green development.
In fact, Africa has enormous natural wealth, estimated at 6.2 trillion dollars in 2018.
It alone has 30% of the world’s mineral resources and 65% of uncultivated arable land, its forests are the most productive in the world in terms of wood and carbon retention. It is also endowed with solar, wind and hydroelectric energy in large quantities.
The report points out that Africa can therefore benefit from the emergence of new technologies, such as the manufacture of electric vehicles.
But to do this, African countries will have to “put in place all the legal and fiscal apparatus required not only to remove the structural obstacles to private investment in climate actions and green transitions, but also to improve the management of their natural resources and create incentives for valorization, transformation and value addition at the local level”, recommends the president of the AfDB group, Akinwumi Adesina, quoted in the report.
Also, the Multilateral Development Banks (MDBs) and other Development Financial Institutions (DFIs) will also have to be “reformed” to remain adapted to the new reality induced by the socio-economic dynamics facing African countries, he said. He suggests.
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