The World Bank has announced a downward revision of growth forecast for almost 60% of countries in sub-Sahara Africa (SSA) for this year, 2023, with Ghana failing to make the list of top ten fastest-growing countries on the continent of Africa.
The bank explained in its latest January 2023 Global Economic Prospects report that the growth slowdown represents a formidable challenge for economic development in the region.
“Growth in SSA is expected at 3.6% in 2023 and 3.9% in 2024. Compared to the June [2022] forecast, growth was revised down for almost 60% of countries, including downward revisions for over 70% of metal exporters which are expected to be affected by the further easing of global metal prices.
“Even as the cost of living pressures are anticipated to moderate, the negative impact of persistent poverty and food insecurity on growth, amplified by other vulnerabilities, such as unfavorable weather, high debt, policy uncertainty, and violence and conflict is anticipated to keep the pace of recoveries subdued in many countries.”
World Bank
According to the report, Senegal is expected to be the fastest-growing economy in Sub-Saharan Africa in 2023, with a growth rate target of 8.0%, followed by Niger with 7.1%. Meanwhile, Cote D’Ivoire and Rwanda both have a growth rate target of 6.8% and 6.7% respectively. The rest of the countries in the top 10 are: Congo, Dem. Rep. (6.4%), Benin (6.2%) Togo (5.6%), Uganda (5.5%), Mauritius (5.5%), Ethiopia (5.3%), and Guinea (5.3%).
Below Average Growth Rate Forecast for Ghana
The World Bank, however, forecast a 2.7% expansion for the Ghanaian economy in 2023, lower than the Sub-Saharan Africa average of 3.6%. It is however expecting the economy to grow by 3.5% in 2024, the same as it projected for 2022.
The 2023 Global Economic Prospects report explained that the Ghanaian economy has been struggling with various setbacks, including rising public debt, elevated inflation (54.3% in December 2022), and a depreciating currency (38.8% in 2022), a reason it is seeking for an International Monetary Fund-support program. This, it said, affected private sector growth in 2022 and will continue this year.
Again, rising input costs, on the back of high fuel and raw material prices impacted negatively on the private sector in 2022. Indeed, the economy slowdown in the third quarter of last year, growing by 2.9%, according to the Ghana Statistical Service.
“New orders and output have been trending down for many months. Rising input costs, on the back of high fuel and raw material prices, compelled businesses to cut workers for the first time in about a year.”
World Bank
Given the current turn of events, it is, therefore, not surprising that the government has announced a growth rate target of 2.8% for this year.
According to experts, the recent downward revision of the growth forecast is a result of multiple shocks affecting the economies on the continent which include the slowing down of the global economy, tightening global financial conditions, elevated inflation driven by rising food and fuel prices exacerbated by the war in Ukraine, adverse weather conditions, and rising risk of debt distress.
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