Presenting a report on recent economic and social developments in Africa Wednesday at the 55th session of the Commission, UNECA's Macroeconomics and Governance Division Director Adam Elhiraika said Africa's GDP growth declined from 4.6 percent in 2021 to 3.6 percent in 2022 but is expected to rebound to 3.9 percent in 2023.
"The slowdown in the global economy, high prices fuelled by the Ukrainian conflict, climate change and worsening international economic and financial conditions significantly impacted Africa's growth in 2022," said Elhiraika, adding that the 3.9 percent growth forecast for 2023 is mainly driven by growth in the continent's east, north and west Africa sub-regions.
In the developing world, Africa was the fastest growing region after East and South Asia (4.5 percent), followed by South-Eastern Europe (3.2 percent), and Latin America (2.1 percent).
"Unfortunately, Africa continues to grow at a low and unsteady rate of GDP," the director said, noting that the anticipated 3.9 percent growth rate this year remains low compared to the pre-COVID-19 periods and Africa needs to create jobs and reduce poverty.
Fiscal deficits and debt levels are projected to improve in 2023, but they remain relatively higher or at par with pre-pandemic levels in most countries except in Central and Southern Africa which has had significant improvements.
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Elhiraika said inflation across the continent is estimated to decline to 12 percent in 2023 from 12.8 percent in 2022 as countries of the continent are expected to tighten their monetary policies to withstand inflationary pressures.
Fiscal space remains constrained despite narrowing economic deficits, making it harder for most countries to invest in major sectors to ensure resilience from shocks, said the director, adding that rising borrowing costs and debt service burdens pose a significant challenge going forward and that Africa's debt-to-GDP ratio is estimated to reach 61.9 percent in 2023.
Elhiraika added that currency depreciation has been more pronounced in countries with flexible exchange rate regimes and in commodity-exporting countries.
Countries with fixed exchange rates, especially those within the Economic and Monetary Community of Central Africa and West African Economic and Monetary Union experienced an average depreciation of 10 percent against the U.S. dollar in 2022.