Economic growth in sub-Saharan Africa is set to decelerate from 3.6% in 2022 to 2.5% in 2023 due to rising instability, weak growth in the region’s largest economies, climate shocks, and lingering uncertainty in the global economy.According to the latest African report by The World Bank, the continued slump in the region’s large economies is dragging down sub-Saharan Africa’s economic performance, and there have been increased attempts to destabilise governments by unconstitutional or violent means in recent years. This increased conf lict and violence in the region weigh on economic activity, and this rising fragility may be exacerbated by climatic shocks. Growth estimates of more than half of the countries in the region (28 of 48) have been downgraded in 2023.The report found that while inf lation had been receding, it was still above central bank targets in most countries in sub-Saharan Africa. It is expected to decline from 9.3% in 2022 to 7.3% in 2023. Yet, 18 countries in the region have average annual inf lation rates of two digits or more in 2023. “Inf lationary pressures are dominated by higher food and fuel prices and weakened domestic currencies – eroding household income,” reads the document.An ongoing challenge on the continent is debt. Debt overhang continues to weigh heavily on sub-Saharan African economies. Debt distress remains widespread, with 21 countries at high risk of external debt distress or in debt distress as of June 2023. Furthermore, the region’s growth has delivered poor job creation and slow poverty reduction. It faces the challenge of creating better jobs for more people. This will require an ecosystem that facilitates firm entry, stability, and growth.
