The IMF has just published an update of its global economic outlook. While the World Bank has lowered its previous forecast for sub-Saharan Africa, the Fund expects a slight increase of 0.1 percentage point due to improving growth in Nigeria.
By 2023, sub-Saharan Africa's economic growth could reach 3.8%. This is clear from the latest statistics published by the International Monetary Fund (IMF) within the framework of its World Economic Outlook.
This new forecast, slightly more optimistic than the one made in October (+0.1 percentage points), is motivated by the expected improvement in economic growth in Nigeria, the region's leading economic power in terms of GDP. According to the IMF, Nigeria's growth should reach 3.2% in 2023, up from 3% in 2022, thanks to "the measures taken to resolve insecurity problems in the oil sector."
On the contrary, South Africa, the second economy in the region in terms of GDP, should grow a meager 1.2% after the economic rebound after the 1948 crisis. This forecast, which represents less than half of the estimated growth for 2022, is due to "a decline in external demand, electricity shortages and structural limitations," according to the Fund's report.
Although new projections for sub-Saharan Africa in 2023 assume a stabilization of growth compared to 2022, which also showed an estimated growth of 3.8%, the IMF expects global production in the current year to decline compared to last year . Although they rise 0.2 percentage points compared to the October forecast, the new IMF figures indicate that global growth in 2023 will be only 2.9%, compared to 3.4% in 2022.
This weak growth is due, according to the institution, to the tightening of global monetary policies, through the massive increase in key rates by central banks, both in developed and developing countries.
This monetary policy aims to reduce the level of inflation, which has reached its peak in several countries. According to the Fund, global inflation is expected to decline from 8.8% in 2022 (annual average) to 6.6% in 2023 and 4.3% in 2024, but will remain above levels prior to the coronavirus pandemic.
«In line with the evolution of global demand, global trade growth is expected to slow to 2.4% in 2023, despite the reduction of supply bottlenecks, before increasing to 3. 4% in 2024″, noted the IMF. In 2023, oil prices are expected to fall by around 16%, while prices of non-fuel commodities will fall by an average of 6.3%,” he adds.
In a report published on January 10, the World Bank lowered its outlook for sub-Saharan Africa to 3.6%. According to the Bank, this underperformance is the result of the expected continued decline in world prices, which should affect several countries in the region that depend on their natural resource exports.
To this should be added, always according to the institution, "a negative impact of the persistence of poverty and food insecurity on growth, amplified by other vulnerability factors such as unfavorable weather conditions, high debt, political uncertainty, "violence and conflict," despite the expected easing of inflationary pressures.
Note that by 2024, the IMF forecasts growth of 4.1% for sub-Saharan Africa and 3.1% for the world economy.