Like the World Bank, IMF lowers Africa’s growth forecasts

BREAKING NEWSOctober 10, 2023 at 12:52 PM UTC

Sub-Saharan Africa is projected to experience a second consecutive year of economic growth contraction in 2023, according to the International Monetary Fund (IMF).

The Fund’s World Economic Outlook report indicates that the region's growth is expected to decline to 3.3% this year, down from 4% in the previous year. However, it anticipates a rebound in 2024, with growth reaching 4%.

These revised projections represent a slight downgrade from the IMF's earlier forecasts in July, where it had estimated Sub-Saharan Africa's growth at 3.5% for 2023 and 4.1% for 2024. They come after a similar projection from the World Bank last week.

Key Takeaways

In the wake of Russia's invasion of Ukraine, which came after the global economy had already been severely affected by COVID-19, food, fuel, and fertilizer prices experienced a significant surge in Africa last year. This price increase was accompanied by currency depreciation, increased servicing costs for debt, and limited access to capital markets, all of which compounded debt-related challenges in the region. Angola's growth was reduced from 3.5% to 1.3% and Nigeria's trimmed from 3.2% to 2.9%. South Africa, facing significant challenges due to power shortages, is expected to grow by just 0.9% this year. In contrast, Kenya's growth is anticipated to accelerate to 5% in 2023, up from 4.8% in 2022, despite budget cuts by the government in response to rising debt costs. Tanzania and Senegal are also expected to experience higher growth this year.