ADB – Macro Africa, 2023

The African Development Bank (ADB) has revised downwards its projections for Africa's average real GDP growth in 2023 and 2024. The revised growth rates are now projected at 3.4% in 2023 and 3.8% in 2024, which are lower than previously predicted. Several factors are contributing to this downward revision, including the long-term effects of COVID-19, geopolitical tensions and conflicts, climate shocks, a slowdown in the global economy, and limited fiscal space to respond to shocks and sustain economic activity. Furthermore, inflationary pressures are being fueled by higher food and energy prices as well as disruptions in global supply chains. Policymakers are facing a challenging trade-off between stimulating economic growth and controlling inflation, given weak fiscal buffers and the structural nature of current inflation trends. Geopolitical tensions in the Middle East could further increase energy prices, triggering more inflationary pressures and constraining global growth, which would have direct implications for Africa's medium and long-term growth prospects. Additionally, potential crop failures due to the projected El Niño weather phenomenon and the rising prices of agricultural fertilizers may negatively impact agricultural productivity and worsen supply conditions, leading to concerns about food insecurity and inflationary pressure.