“The continent risks sliding into stagflation, a combination of slow growth and high inflation. Real GDP is expected to grow by 4.1% in 2022, significantly lower than the nearly 7% growth in 2021».
The African development bank (AfDB) relays its concerns in its report on the economic prospects in Africa, 2022 edition. According to the experts of the honorable institution, the Russian-Ukrainian conflict which has exacerbated the already devastating effects of the Covid-19 pandemic, might darken the continent’s economic outlook as activity rebounded in 2021. Overall macroeconomic fundamentals in a number of countries have improved.
However, two major challenges need to be met: lowering the level of public debt even if the debt ratio should stabilize this year, it is still high, above 70%. More and more countries find themselves in a situation of over-indebtedness, note the economists of the African development bank. The second threat is inflation.
The average inflation rate should stand at 13.5% in 2022 once morest 13% in 2021, under the pressure of a surge in the prices of raw materials, in particular energy and foodstuffs, driven by the intensified by the war in Ukraine.
“Recovery for Africa will be extremely costly. The continent will need at least an additional $432 billion to mitigate the effects of the pandemic alone, resources it does not have”finds Akinwumi AdesinaPresident of the AfDB, introducing the Continent’s Economic Outlook Report.
While the pandemic has already pushed, in 2021, more than 30 million people into extreme poverty and 22 million into unemployment, the prolonged effects of economic disruption resulting from the conflict between Russia and Ukraine might push 1.8 million more Africans in extreme poverty in 2022. This figure might reach 2.1 million in 2023.
A gloomy picture, especially since the most affected layers are women and men working in the informal sector.
If the Russian-Ukrainian conflict persists, growth in Africa should stagnate at around 4% in 2023, projects the AfDB, which is campaigning during these annual meetings on several grounds, for the reallocation of 100 billion Special Drawing Rights (SDRs) promised to Africa, and for a fairer energy transition for the continent.
The persistence of the Covid-19 pandemic and the inflationary pressures caused by the Russia-Ukraine war will slow growth to 4.1% in 2022 and remain “frozen” at this level in 2023.
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