Via The Africa Report, a look at the top performing economies in Africa:

The continent is experiencing an uneven economic recovery, with significant variations from one country to another, according to the latest edition of the World Bank’s “Africa’s Pulse” report.

Inflationary pressures, threats of recession, and declining investment have contributed to a weak economic growth rate in sub-Saharan Africa, says the World Bank’s Africa’s Pulse report.

“Combined with debt vulnerabilities and sluggish investment growth, [this] risks a lost decade for poverty reduction,” warned Andrew Dabalen, the World Bank’s Chief Economist for Africa.

Growth in sub-Saharan Africa is forecast to slow further, dropping from 3.6% in 2022 to 3.1% in 2023.

The real GDP growth of the West and Central African sub-region is expected to decline to 3.4% in 2023, down from 3.7% in 2022, while that of East and Southern Africa would fall to 3% in 2023, down from 3.5% in 2022.

Mining, manufacturing, and services
Despite numerous challenges, some countries in the region have shown resilience. Kenya, Côte d’Ivoire, and Democratic Republic of Congo (DRC), with respective growth rates of 5.2%, 6.7%, and 8.6% in 2022, are among the most significant examples.

Meanwhile, other countries saw their growth estimates revised upwards for the past year. They are:

Zambia (+0.8 point to 3.9%)
Mauritania (+1.2 points, to 5.2%)
Ethiopia (+2.9 points, to 6.4%)

In DRC, economic growth was primarily driven by the mining industry, especially copper and cobalt, due to an expansion of production capacity and a recovery in global demand.

However, growth outside of this sector remained moderate, and private consumption was limited due to inflation, which reached 13.1% at the end of 2022, according to the International Monetary Fund (IMF). Growth was also fuelled by exports and public investments.

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In Kenya, economic indicators remained relatively robust due to the strengthening of the manufacturing industry, increased investor confidence due to the credibility of the new administration’s fiscal stabilisation plan, and observed risk appetite.

In Côte d’Ivoire, private consumption recovery, supported by an increase in public wages to counter inflation, as well as public investments, were the main drivers of growth, according to the report. The industry (+8.1%) and services (+6.8%) sectors also made significant contributions.

But even in these countries, the World Bank notes that governments must redouble efforts in macroeconomic stability, domestic revenue mobilisation, debt reduction, and productive investments to reduce extreme poverty and stimulate shared prosperity in the medium and long term.

Inflation and debt
Over-indebtedness has become a major problem in 22 sub-Saharan African countries as of December 2022. This issue is expected to persist due to unfavourable global financial conditions that have increased borrowing and debt servicing costs in the region.

According to the World Bank, this situation hinders investments in development areas and threatens macroeconomic and budgetary stability that have already been weakened by the Covid-19 pandemic.

Inflation, which reached 9.2% in 2022 and appears to have peaked, is still expected to remain high at 7.5% in 2023, well above the limits set by central banks. Consequently, investment growth in sub-Saharan Africa has slowed significantly, dropping from 6.8% in 2010-2013 to 1.6% in 2022, with a much more pronounced deceleration in East and Southern Africa than in West and Central Africa.

New Opportunities
In its report preceding the World Bank and IMF Spring Meetings, the Bretton Woods Institution explains that the rapid decarbonisation of the world “will bring significant economic opportunities to Africa.”

According to James Cust, lead economist at the World Bank, metals and minerals will be needed in larger quantities for low-carbon technologies such as batteries.

Thus, “if good policies are put in place, these resources could increase tax revenues, enhance opportunities for regional value chains that create employment, and accelerate economic transformation,” the document reads.

However, this data must be treated with caution.

Even though valuing natural resource wealth offers the possibility of improving the viability of African countries’ public finances and debt, World Bank experts warn that this can only happen “if countries adopt adequate policies and learn from past periods of economic expansion and slowdown.” Regardless of the opportunities and obstacles, economists all agree on one thing: “better governance.”