According to the latest World Bank forecast, Sub-Saharan Africa is bracing itself for a slowdown in economic growth, with projections indicating a decline from 3.6 percent in 2022 to 2.5 percent in 2023.

Based on the World Bank’s findings, it emphasized the urgent need for stability, increased growth, and job creation to avert a potential “lost decade.”

“With up to 12 million young Africans entering the labor market across the region each year, it has never been more crucial for policymakers to revamp their economies and provide better job opportunities for the people,” Andrew Dabalen, the World Bank’s Chief Economist for Africa stressed.

The report reveals that regional growth is projected to slow to 2.5 percent in 2023, dropping from 3.6 percent in the previous year, with an anticipated rebound to 3.7 percent next year and 4.1 percent in 2025. However, in per capita terms, the region has not experienced positive growth since 2015, as economic activity has failed to keep pace with the rapid increase in population.

The report also notes that while approximately 12 million Africans join the labor market annually, the current growth patterns generate only 3 million jobs in the formal sector.

South Africa, the continent’s most developed economy, is expected to grow by a mere 0.5 percent this year, primarily due to its severe energy crisis.

Similarly, economic growth in Nigeria and Angola, top oil-producing nations, is anticipated to slow to 2.9 percent and 1.3 percent, respectively. Sudan, amidst a major internal armed conflict, faces a significant 12 percent contraction. Excluding Sudan, regional growth is estimated at 3.1 percent.

Bright Spots; Pockets of Resilience Identified by World Bank.

Despite domestic challenges and uncertain global growth, the World Bank identifies “pockets of resilience” within the region. For instance, the Eastern African community is projected to achieve a growth rate of 4.9 percent in 2023, while the West African Economic and Monetary Union (WAEMU) anticipates a growth rate of 5.1 percent.

Analyzing the speed and persistence of per capita growth over two timeframes –2001-2019 and 2022-2025 — the report shows that a few countries, including Rwanda, Benin, Côte d’Ivoire, Ethiopia, Mauritius, and Uganda, had demonstrated economic resilience, maintaining growth rates above 2.5 percent in both periods

According to the World Bank, Rwanda’s economic activity had a robust start in 2023, with real GDP growing by 9.2 percent year-on-year in the first quarter, following an 8.2 percent increase in 2022. The Bank attributes this expansion to robust growth in private consumption and increased net exports.

While inflation is downward, it remains above central bank targets in most regional countries, including Rwanda. Contributing factors include a global demand slowdown, easing global supply chain disruptions, lower commodity prices, and contractionary monetary policies, all leading to lower inflation. In 2023, inflation is expected to decrease to 7.3 percent, down from 9.3 percent in 2022.