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Nairobi, Kenya | Xinhua | The World Bank on Wednesday projected the economy in Sub-Saharan Africa to slow down to 3.6 percent in 2022 from 4 percent in 2021.
The World Bank said the region’s economy is struggling to pick up momentum amid a slowdown in global economic activity, continued supply constraints, outbreaks of new COVID-19 variants, high inflation and rising financial risks due to high and increasingly vulnerable debt levels.
“Economic growth in the region is expected to decelerate in 2022 amid a global environment with multiple shocks, high volatility and uncertainty,” the lender said in its latest Africa’s Pulse, a biannual analysis of the near-term regional macroeconomic outlook.
According to the World Bank, adding to the region’s growth challenges are rising global commodity prices, which are increasing at a faster pace since the onset of the conflict between Russia and Ukraine.
It noted that the recovery in 2021 was supported by the revitalization of global trade, high commodity prices and the lifting of COVID-19 restrictions that had been imposed to contain the spread of the different waves of the pandemic.
“Private consumption and, to a lesser extent, gross fixed investment contributed to the recovery from the expenditure side, while net exports held back the recovery,” said the report.
The report said that the economic upturn was also buoyed by the service sector, while weather conditions favored agriculture from the production side.
The findings indicated that the Russia-Ukraine conflict has affected Sub-Saharan African economies through higher commodity prices and disruptions in international trade thus aggravating existing supply chain problems.
The report observed that a sharp compression of imports from Russia and Ukraine, along with global trade deceleration and rising commodity prices, have affected countries in the region that are net commodity importers — either through direct linkages with the countries in conflict or through soaring global commodity prices.
“As African countries face continued uncertainty, supply disruptions and soaring food and fertilizer prices, trade policy can potentially play a key role by ensuring the free flow of food across borders throughout the region,” said Albert Zeufack, World Bank chief economist for Africa.
Zeufack suggested that amid limited fiscal space, sub-Saharan African policymakers must look to innovative solutions such as reducing or waiving import duties on staple foods temporarily to provide relief to their citizens.
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Xinhua
