African leaders have called for global support to help them navigate the rising challenges in their economies after the presentation of Africa’s Macroeconomic Performance and Outlook Report yesterday, Friday, February 17th, 2023.
Moreover, the African leaders pledged to take immediate action to integrate the recommendations from the newly released report into their national development plans.
Haven observed the impressive resilience of the African economy after assessing the report, President of the African Development Bank Group, Dr. Akinwumi Adesina, indicated that global support is needed to help the continent navigate financial burdens and its security challenges. Adesina, therefore called for strong and collective support for Africa to help the continent navigate the challenges it is confronted with, especially, debt burden and debt vulnerabilities.
“Despite the slowdown occasioned by multiple shocks, Africa demonstrated continued resilience in all but one country and maintained a positive growth rate in 2022 with stable outlook in 2023 and 2024. African economies are indeed resilient.
“Africa cannot run up the steep hill carrying a bag of debt on its back. The channeling of the additional $100 billion of Special Drawing Rights will make a huge difference. We must join hands to harness the enormous opportunities in Africa. There is no doubt that we will make good progress. However, we must work fast, be inclusive, and be competitive.”Dr. Adesina
This addresses the concerns raised by Zainab Ahmed, Nigeria’s Minister of Finance for Budget and National Planning, who in his submission admitted that all the highlights from the report pointed to the state of Nigeria economy. Ahmed confessed still battling some challenges as a country though, steering the country towards pre Covid-19 era.
“We have been asking for a liquidity facility as part of the SDRs (Special Drawing Rights) to act as a cushion for us. We have also asked multilateral development banks to give us longer-term financing. Nigeria has shown a lot of resilience. We just need that support to enable us to take the full potential.”Ahmed
In his opening remarks, Moussa Faki Mahamat, African Union Commission Chairperson told the participants that the report would be presented to heads of state at the African Union Summit to help steer national planning.
“Knowledge is power. The report, to be published twice a year, is a wealth of knowledge – with deep insight into what is going on in Africa in the macroeconomic sphere. It identifies challenges and opportunities for the good of our continent.
“If governments, the private sector, and other stakeholders adopt the report, they will be better placed to make informed decisions.”Mahamat
The report calls for timely structural reforms to enhance government-enabled private-sector industrialization in key areas.
Dr. Situmbeko Musokotwane, Zambia’s Minister of Finance and National Planning, in a speech on behalf of the Zambian President, Hakainde Hichilema said the study conducted by the African Development Bank (AfDB) Group, provided an impetus for the continent’s leaders to forge ahead with needed reforms.
The Zambian President, in the speech read on his behalf, described the report as a significant milestone in pursuit for evidence-based knowledge to inform policymaking for a more prosperous and sustainable future for Africa.
“The findings of this important report, therefore, provide us with a set of concrete policies that we must urgently implement to sustain the recovery and build resilience in Zambia, and on the continent more generally.”Hichilema
Again, Hichilema observed that the Zambian economy has shown resilience, although not spared the global shocks. Additionally, President Hichilema acknowledged the impact of the country’s heavy debt burden on its fiscal stability and said his administration had launched reforms that would spur economic growth to 4.0 percent in 2023 and 4.3 percent in 2024.
Also appraising the report, Assistant Minister of Finance for Policies and Economic Affairs of Egypt, Dr. Mohammed Ibrahim, said the report is helpful for African policymakers and researchers as a timely databank of sound and evidence-based projects for development and planning.
Africa can grow by building a single market
In a presentation, the Director of the Center for Sustainable Development, Columbia University, Prof. Jeffrey Sachs, said that Africa had the capacity to achieve 7- 10 % yearly growth. To achieve this, he suggested Africa could take advantage of its population to grow a robust single market, citing examples like China and India.
“Building a single market will enable Africa to position among the three largest global marketplaces. The continent has the greatest growth potential.”Prof. Sachs
Prof. Sachs, therefore challenged African leaders to build vital regional infrastructure and close the infrastructure gaps over the following decades. Also, he urged governments to lead a revolution to bring about affordable access to health care and education.
Sachs called for greater financing for the continent to place it on sustainable growth, observing that the African Development Bank is critical to meeting the continent’s financial needs.
“The African Union needs to become a permanent of the G-21.”Prof. Sachs
Also present during the presentation of the report was the Acting Chief Economist and Vice President of the African Development Bank, Prof. Kevin Urama, who affirmed that Africa remains the place to invest, despite suffering global shocks.
“As we gather here today, global macroeconomic conditions have become increasingly uncertain due to multiple overlapping shocks that make policymaking and investment decisions very challenging. Countries need regular diagnostics and focused policy actions to address these recurring and overlapping shocks.”Prof. Urama
Key Highlights from Africa’s Macroeconomic Performance and Outlook Report
Following two years of global shocks, the report notes that African economies are set to overcome various domestic and global shocks and return to a path of economic recovery, stability, and growth.
The lingering effects of the Covid-19 pandemic, the ravages of accelerating climate change, and the impact of rising geopolitical conflicts and tension slowed Africa’s growth to an average of 3.8% in 2022.
To sustain growth, Africa’s economies will require comprehensive information and insights to navigate a labyrinth of intertwined global risks, the report stated.
The bank will release the report in the first and third quarters of each year to complement its flagship Annual African Economic Outlook. The African Development Bank is the first institution to release a macroeconomic outlook for Africa for 2023.