LAGOS, Nigeria (VOICE OF NAIJA)-The World Bank projects a rebound in African economies, forecasting growth to increase from 2.6 per cent in 2023 to 3.4 per cent in 2024 and 3.8 per cent in 2025, as revealed in the latest Africa’s Pulse Report released by the World Bank on Tuesday.
The report indicated that rising private consumption and decreasing inflation were contributing to an economic recovery in Sub-Saharan Africa.
It cautioned that the recovery remained fragile amidst uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence.
“However, this recovery remains tenuous. While inflation is cooling across most economies, falling from a median of 7.1 to 5.1 per cent in 2024, it remains high compared to pre-COVID-19 pandemic levels.
“Additionally, while the growth of public debt is slowing, more than half of African governments grapple with external liquidity problems and face unsustainable debt burdens.
READ ALSO: World Bank Lauds Mbah’s Strides On Water, Agric Development
“Overall, the report underscores that in spite of the projected boost in growth, the pace of economic expansion in the region remains below the growth rate of the previous decade (2000–2014). This is insufficient to have a significant effect on poverty reduction. Moreover, due to multiple factors, including structural inequality, economic growth reduces poverty in Sub-Saharan Africa less than in other regions.”
The report emphasized the necessity for transformative policies to tackle entrenched inequality, ensure sustainable long-term growth, and effectively alleviate poverty.
The statement quoted the World Bank Chief Economist for Africa, Andrew Dabalen, as saying, “Per capita Gross Domestic Product growth of one per cent is associated with a reduction in the extreme poverty rate of only about one per cent in the region, compared to 2.5 per cent on average in the rest of the world. In a context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone.
“It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society.”
The report highlighted that external resources to meet the gross financing needs of African governments were shrinking and those available were costlier than they were before the pandemic
READ ALSO. FG Moves To Secure $1Bn World Bank Loans
It added, “Political instability and geopolitical tensions weigh on economic activity and may constrain access to food for an estimated 105 million people at risk of food insecurity due to conflict and climate shocks. African governments’ fiscal positions remain vulnerable to global economic disruptions, necessitating policy actions to build buffers to prevent or cope with future shocks. What’s more, inequality in Sub-Saharan Africa remains one of the highest in the world, second only to the Latin America and Caribbean region, as measured by the region’s average Gini coefficient.’’
It highlighted that despite recent improvements, access to fundamental services like education and healthcare remained highly unequal.
It noted, “Disparities also exist in access to markets and income-generating activities, irrespective of people’s skills. Taxes and poorly targeted subsidies may also have an outsized impact on the poor.”
The report emphasized the need for various policy measures to promote stronger and more equitable economic growth.
It added, “These include restoring macro-economic stability, promoting intergenerational mobility, supporting market access, and ensuring that fiscal policies do not overburden the poor.”
(NAN)