The IMF forecasts a decrease in economic growth for the Sub-Saharan African region

In its latest World Economic Outlook report, the International Monetary Fund (IMF) has reduced its economic growth projections for Sub-Saharan Africa. According to the report, the region’s economic growth is expected to slow for the second consecutive year in 2023 before rebounding in 2024.

The IMF’s World Economic Outlook report indicates that the growth in the region is projected to decline to 3.3% this year, down from the 4% growth observed in the previous year, with a subsequent recovery to 4% in 2024.

This projection is slightly lower than the IMF’s July forecast, which had anticipated growth of 3.5% in 2023 and 4.1% in the following year for Sub-Saharan Africa.

The downgrade in growth prospects can be attributed to various factors, including the impact of Russia’s invasion of Ukraine, which led to surges in food, fuel, and fertilizer prices in Africa. This, coupled with the ongoing economic effects of the COVID-19 pandemic, resulted in weaker currencies, increased debt servicing costs, and limited access to capital markets, exacerbating the region’s debt-related challenges.

The IMF has made significant revisions to its growth forecasts for 2023, with oil-producing Angola’s growth expected to be 1.3%, a substantial decline from the 3.5% projection made in April. Similarly, Nigeria’s growth forecast has been adjusted downward from 3.2% to 2.9%. South Africa, facing severe power shortages, is projected to experience modest growth of 0.9% this year.

On a more positive note, Kenya is anticipated to see its growth accelerate to 5% in the current year, up from 4.8% in 2022, despite government budget cuts in response to rising debt costs. Tanzania and Senegal are also expected to achieve higher growth rates in the current year.

The region is grappling with rising living costs, leading to protests in countries like Ghana and Kenya. The IMF’s forecasts indicate that annual inflation is expected to reach 16.2% by the end of this year, consistent with the previous year’s rate, before gradually declining to 10.5% by the end of the following year.