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Africa Moyo in SHARM EL-SHEIKH, Egypt
African economies are expected to continue to withstand the various global shocks, including the effects of the war in Ukraine, with average growth projected to stabilise at 4,1 percent in 2023 to 2024.

This is contained in the African Economic Outlook 2023 which was launched here yesterday by the African Development Bank (AfDB) on the sidelines of the bank’s ongoing annual meetings.

Finance and Economic Development Minister Professor Mthuli Ncube has projected that Zimbabwe’s economy could grow 6 percent this year, on the back of strong performances in agriculture, mining and tourism.

The launch was attended by AfDB president Dr Akinwumi Adesina and United Kingdom Minister of State for Development and Africa, Andrew Mitchell, among others.

In his presentation during the launch of the African Economic Outlook report yesterday, AfDB vice president Professor Kevin Urama said African countries are dealing with multiple shocks, including the effects of the Covid-19 pandemic, disruptions to global supply chains due to the war in Ukraine, and a tightening of global financing conditions.

“These shocks have reduced the continent’s real GDP growth from 4,8 percent in 2021 to 3,8 percent in 2022. “However, African economies remain resilient, with average growth projected to stabilise at 4,1 percent in 2023–24,” he said.

Prof Urama said the growth outlook is subject to significant downside risks, including subdued global growth weighing on Africa’s exports, persistence of tight global financial conditions exacerbating debt servicing costs, significant losses and damages due to frequent extreme weather events exacerbating fiscal pressures, and the continued war in Ukraine, which is increasing global uncertainty.

Other factors include persistent disruptions to global supply chains and elevated geopolitical risks due to upcoming national elections in some countries.

The African Economic Outlook 2023 underscores the urgency to fast-track climate action and green transitions to drive the continent’s inclusive and sustainable development. The AfDB’s new research, based on African countries’ latest submitted Nationally Determined Contributions (NDCs), estimates that private sector financing will need to grow annually by 36 percent until 2030 to close the continent’s climate finance gap, evaluated on average at US$213,4 billion per year.

This will be important to address the continent’s climate financing needs, estimated at as much as US$2,8 trillion over 2020-2030, or US$250 billion annually.

Prof Urama said unlocking private climate financing will require addressing both demand- and supply-side barriers while developing innovative financing instruments to tap into the continent’s enormous investment opportunities in climate and green growth.

The report also highlights the important role of Africa’s huge natural capital, valued at US$6,2 trillion in 2018, in bridging the prevailing climate finance gap and promoting green growth transitions.

Through sustainable management, Africa’s abundant natural capital can be transformed into financial assets to complement financing for climate adaptation and mitigation, as well as into investments that support green growth transitions.

This will require the deployment of appropriate policies and instruments, including fiscal instruments, to better understand the true value of Africa’s natural capital and strengthen local content and value addition.

It will also build institutional capacity to address gaps in governance that have prevented the continent from realising the full potential of its natural endowments and create regional value chains and markets to benefit from cross-regional synergies, reads the report in part.

The launch was attended by AfDB president Dr Akinwumi Adesina and United Kingdom Minister of State for Development and Africa, Andrew Mitchell, among others.