The World Bank has released the global economic outlook and predicted 3.3 economic growth for Sub-Saharan Africa in 2022 and 2023.
The report which described economic recovery by sub-Saharan African region from recession in 2021 as ‘timid and fragile, said the region is projected to grow at a rate of 3.3 percent—a weaker pace of recovery than that of advanced and emerging market economies.”
According to the bank, in 2022–23, the region is projected to grow at rates below five percent.
It was not all negative as it expressed hopes that with rapid vaccines deployment in the region and withdrawal of COVID-19 containment, there is hope that a five percent growth could be attained.
African countries, it stated, are undertaking structural and economic reforms in response to the pandemic. They have also been relatively disciplined on monetary and fiscal policies, it noted.
The world Bank noted that limited fiscal space was becoming an impediment to African countries in injecting the fiscal resources required to launch a vigorous policy response to COVID-19.
It stated that accelerating the economic recovery in the region would require significant additional external financing, in addition to rapid deployment of the vaccine.
“Africa’s unique conditions, such as low baseline development, preexisting climate vulnerabilities, low use of fossil fuel energy, and high reliance on climate-sensitive agriculture, pose additional challenges from climate change, but also provide opportunities to build and use greener technologies,” the bank said.
“Policy makers need domestic and international financing to create new jobs—including green jobs. For example, in a region where much of the infrastructure, cities, and transportation systems are yet to be built, investments in climate-smart infrastructure can help cities create jobs,” it added.
“Africa’s unique conditions, such as low baseline development, preexisting climate vulnerabilities, low use of fossil fuel energy, and high reliance on climate-sensitive agriculture, pose additional challenges from climate change, but also provide opportunities to build and use greener technologies,” the bank said.
It explained that climate change should be considered by policymakers as a source of structural change. For instance, the energy access problem in the region can be solved by the adoption of renewable energy alongside expansion of the national grid.
“In resource-rich countries, wealth exposure to carbon risk can be reduced by fostering asset diversification that supports human and renewable natural capital accumulation. Financing climate change adaptation in Sub-Saharan Africa is essential, and policies to mobilise resources are critical to create more, better, and sustainable jobs”.
The World Bank noted that the magnitude of the contraction of Ukraine’s economy will depend on the duration and intensity of the war with Russia.
Hit by unprecedented sanctions, Russia’s economy has already plunged into a deep recession with output projected to contract by 11.2 percent in 2022.
“The magnitude of the humanitarian crisis unleashed by the war is staggering. The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” said Anna Bjerde, World Bank Vice President for the Europe and Central Asia region.
(businessstandardsng.com)
