African economies remain resilient with average growth projected to stabilize at 4.1 percent: AfDB

Addis Ababa, May 24, 2023 (FBC) – The African Economic Outlook 2023 is being published as African countries are dealing with multiple shocks, including the effects of the COVID-19 pandemic, disruptions to global supply chains due to Russia’s prolonged invasion of Ukraine and a tightening of global financing conditions.

The African Economic Outlook 2023 says African economies remain resilient amid multiple shocks encountered in the continent.

The theme of the 2023 African Economic Outlook is “Mobilizing Private Sector Financing for Climate and Green Growth in Africa”.

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 stabilize at 4.1 percent in 2023–24.

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, the prolongation of Russia’s invasion of Ukraine, which is increasing global uncertainty and persistent disruptions to global supply chains.

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 Bank’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 $213.4 billion per year.

The report also highlights the important role of Africa’s huge natural capital, valued at $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.