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Africa is set to be the world's second-fastest growing region after Asia in 2023-4, according to the African Development Bank’s (AfDB) latest African Economic Outlook report.

The report predicts that Africa will consolidate its post-pandemic recovery to achieve GDP growth of more than 4% in 2023 and 2024.

The pandemic coupled with supply chain disruptions following Russia’s invasion of Ukraine and a tightening of global financing conditions caused the continent’s real GDP growth to fall from 4.8 percent in 2021 to 3.8 percent in 2022. But the AfDB says Africa is moving in the right direction again.

“The report shows that in the face of these challenges, African economies have demonstrated remarkable resilience,” said Dr Akinwumi Adesina, President, AfDB at the launch of the report on 24 May. “The continent achieved an average growth rate of 3.8% in 2022, with projected average growth of 4.1% for 2023–2024. This surpasses the global average of 3.4% in 2022.”

Looking more closely at the AfDB’s growth projections for individual regions within Sub-Saharan Africa, East Africa is set to be the strongest performer in the medium term, with growth in excess of 5% in 2023 and 2024. 

On a country level, the standout markets this year will be Côte d’Ivoire, Rwanda and Democratic Republic of Congo.

Economic performance by region

Central Africa

Growth in Central Africa rose to 5% in 2022 from 3.4% in 2021, driven by high commodity prices. (The region mainly comprises net exporters of commodities such as crude oil, minerals and timber.) GDP growth is projected at 4.9% for 2023 and 4.6% in 2024. 

The bank highlighted the Democratic Republic of Congo as the region’s strongest market, with real GDP growth exceeding 6% since 2021, led by the expansion of the mining sector. The forecast for 2023 is 8%. Growth in Cameroon and Congo will average above 4% in the medium term, while Equatorial Guinea faces a prolonged recession extending into 2024. Real GDP is projected to decline 1.4% in 2023 and by 6.3% in 2024. This is due to “declining hydrocarbon output from maturing operational oilfields and tightening global financial conditions hindering investments in new oil and gas fields,” the bank noted.

East Africa 

East Africa - the only region in Africa that escaped a recession during the pandemic - is forecast to enjoy growth of 5.1% in 2023, increasing to 5.8% in 2024. The bank attributes its strong performance on the region’s more diversified production structure. 

Growth slowed in 2022 to 4.4%, from 4.7% in 2021 due to climate shocks, internal conflict and higher international prices for energy and food: most countries in the region are net importers of commodities. 
The strongest growth will be seen in Ethiopia, Rwanda and Uganda.

Rwanda’s economy has been expanding by 7% in recent years, driven by infrastructure spending and higher mineral exports, and is projected to maintain this momentum in 2023 and 2024. Growth in Uganda and Ethiopia is also projected to be above 5%. Uganda will benefit from investments in the oil sector, while Ethiopia is set to benefit from continued infrastructure spending. 

Southern Africa

The AfDB writes that Southern Africa faces significant headwinds to growth, ranging from structural weakness in South Africa, high debt in Zambia and Zimbabwe, and adverse weather conditions in Malawi and Mozambique. Growth slowed in 2022, declining to 2.7% from 4.4% in 2021. 

South Africa, the region’s largest economy, saw just 2% real GDP growth in 2022, compared 4.9% the year before. Power outages, inflation and floods were among the reasons given for the weaker performance. The bank expects growth in the region to remain subdued, with real GDP growth of just 1.6% in 2023, rising to 2.7% in 2024. 

Mozambique is expected to enjoy growth of 4.8% in 2023 and 8.3% in 2024 driven by its extractive and agricultural sectors. The AfDB notes that “Faster debt resolution in Zambia could also unlock stalled investments and cement macroeconomic stability, providing a boost to the country’s growth, which is projected to accelerate to an average of 4.1%.”

West Africa

Growth in west Africa slowed to 3.8% in 2022 from 4.4% in 2021. All countries except Cabo Verde, The Gambia, Guinea, Mali and Niger, recorded slower growth in 2022. 

The bank noted that the smallest economies in the region are performing strongest, enjoying growth rates above 5%. The region’s two biggest economies, Ghana and Nigeria, are weighed down by inflation, high public debt and depreciating local currencies. Ghana is expected to see GDP growth of 2.4% in 2023-4, down from 3.3% in 2022, while growth in Nigeria will remain unchanged from 2022 at 3.3% in 2023-4. 

The strongest economy in West Africa at present is Côte d’Ivoire, where GDP growth is expected to accelerate from 6.7% in 2022 to 7.1% in 2023-24, driven by investment in logistics, renewable energy projects, construction projects to meet growing urbanisation rates and preparations to host the 34th edition of the Africa Cup of Nations in January 2024. Across the region as a whole, growth will average 3.9% in 2023 and 4.2% in 2024.
 

Top photo: Africa Map (© Axstokes | Dreamstime)