African economies remain optimistic despite multiple shocks, says VP Urama | of the African Development Bank African Development Bank

African economies remain resilient despite multiple shocks, with 53 of the 54 African countries maintaining positive growth and a stable outlook for the 2023/24 period, the African Development Bank forecasts.

Lecturer. Kevin Urama, acting chief economist and vice president for economic governance and knowledge management at the bank, said that with Africa’s abundant natural capital, huge youth population and growing economy, there is a huge opportunity for low-income economies to recover. after such shocks. as the Covid-19 pandemic.

Urama spoke in Abidjan, Ivory Coast, on January 31, at the launch of the International Monetary Fund’s Macroeconomic Developments and Prospects in Low-Income Countries – 2022 report. will re-enter the ten fastest growing economies in the world,” he said.

He said many low-income countries are in Africa and noted that the IMF report comes at an opportune time, especially as most of these economies struggle with complex domestic and external economic shocks.

“These shocks threaten the recovery and momentum we have seen from countries trying to make a comeback from the devastating effects of Covid-19 and also what the Russian invasion of Ukraine is creating in the global economy,” Urama said.

He explained that the overlapping shocks are disrupting supply chains in Africa and the world and fueling widespread energy and food price inflation.

Prevailing global financial conditions, the cost of domestic debt servicing and the lingering effects of the Covid-19 pandemic are all creating significant headwinds facing African countries. Inflation is accelerating rapidly, while food and commodity prices continue to rise, food insecurity increases and the risk of social unrest in low-income countries, including Africa, increases.

Citing World Food Program data, Urama said that more than 345 million people in 82 countries worldwide currently suffer from acute food insecurity, and there is a need for better access to food, energy and facilities that can help address some of these challenges.

“In Africa last year, by our own estimate, more than 15 million people were driven into extreme poverty due to high energy prices and food price inflation,” he said.

He said the African Development Bank’s 2023 Africa’s Macro-Economic Performance and Outlook report, which was launched on January 19, shows that these inflation trends could ease in 2023-2024, providing some cautious optimism about the continent’s outlook .

African and middle-income countries will face major challenges in 2023, Urama warned.

Roland Kangni Kpodar, deputy head of the Department of Strategy, Policy and Assessment of the International Monetary Fund, presented the IMF report. He said the Covid-19 pandemic has disproportionately affected low-income countries.

“Despite the low number [Covid-19] identified cases, health systems in low-income countries were severely affected by the pandemic, as they were already vulnerable even before the pandemic,” said Kpodar.

In addition to the health implications, Kpodar said the loss of learning hours due to school closures caused a setback to human capital development in these countries.

The huge negative impact of the pandemic on the economies of low-income countries revealed not only the limited policy space they already had before the pandemic, but also the high structural vulnerability to such shocks, he added.

“Within countries, inequality has also increased as most disadvantaged groups, including women and those in the informal economy, suffered the most from the economic impact of the pandemic,” said Kpodar.