The World Bank in its latest Africa’s Pulse, a biannual analysis of the near-term regional macroeconomic outlook, has projected a 2.7% growth for Nigeria in 2022.
Of the region’s three largest economies – Angola, Nigeria, and South Africa – only Nigeria is projected to enjoy a fairly good growth in 2022.
The report said growth in South Africa is expected to decline by 2.8 percentage points in 2022, dragged by persistent structural constraints.
Angola is projected to continue its growth in 2022, but at just 0.2 per cent.
“Angola and Nigeria are expected to continue their growth momentum in 2022, up by 2.7 and 0.2 percentage points respectively, in part due to elevated oil prices and good performance in the non-oil sector.
Resource-rich countries, especially their extractive sectors, will see improved economic performance due to the war in Ukraine, while non-resource rich countries will experience a deceleration in economic activity,” said the World Bank.
In the report, the World Bank, estimates growth in Sub-Saharan Africa at 3.6 per cent in 2022, down from 4 per cent in 2021, as the region continues to deal with new COVID-19 variants, global inflation, supply disruptions and climate shocks.
The bank explained that recovery remained uneven, incomplete and was happening at varied rates of speed across the region.
It said this was due in part to elevated oil prices and good performance in the non-oil sector.
It said: Excluding Angola, Nigeria and South Africa, regional growth is projected at 4.1 per cent in 2022, and 4.9 per cent in 2023. The Eastern and Southern Africa sub-region shows sustained recovery from the recession, at 4.1 per cent in 2021, down to 3.1 per cent in 2022 and settling around 3.8 per cent in 2024.”
The region’s growth challenges, the World Bank report said, are rising global commodity prices, which are increasing at a faster pace since the onset of the conflict between Russia and Ukraine.
It pointed out that as top world exporters of food staples – Russia and Ukraine – for a substantial share of wheat, corn and seed oil imports, all of which may be halted if the conflict persists.
While Sub-Saharan economies are also likely to be impacted by tightening of global conditions and reduced foreign financial flows into the region, the analysis notes that the high fuel and food prices will translate into higher inflation across African countries, hurting poor and vulnerable citizens, especially those living in urban areas.
The bank cited one point of concern as the increased likelihood of civil strife as a result of food and energy-fueled inflation, particularly in the current environment of heightened political instability.
“As African countries face continued uncertainty, supply disruptions and soaring food and fertilizer prices, trade policy can potentially play a key role by ensuring the free flow of food across borders throughout the region. Amid limited fiscal space, policymakers must look to innovative solutions such as reducing or waiving import duties on staple foods temporarily to provide relief to their citizens,” said World Bank Chief Economist for Africa, Albert Zeufack.
The report highlighted the importance of expanding social protection programmes beyond safety nets to strengthen economic resilience and responsiveness to shocks, particularly for poor and vulnerable households.
Recommendations include developing social insurance, savings and labour market programmes that contribute to economic resilience by protecting urban informal workers and help the population invest in their health and education.