Regional growth should slow down in 2022, reaching 3.6 %, while the continent’s debt level has never been so high since the beginning of the century.
Le Monde with AFP
It was to be a year of economic recovery for Africa, but 2022 finally marks the multiplication of the difficulties for the continent, taken in the consequences of the war in Ukraine and the multiple shocks which are shaking the world economy.
After a rebound last year, the economic growth of sub -Saharan Africa should slow down in 2022 to reach 3.6 % and maintain 3.7 % in 2023, but short -term prospects are “extremely uncertain “Underlines the International Monetary Fund (IMF) in its regional report published Friday October 14. “The prospects of the region are directly linked to developments in the world economy, estimates the institution. Under these conditions, political leaders are faced with one of the most difficult environments in recent years.”
In question, an unprecedented conjunction of difficulties, between the slowdown in the United States, China and Europe -the main export markets for the continent -, the increase in energy prices and foodstuffs caused by The war in Ukraine, and a financial market which favors the safest investments, starting with the American debt. This economic situation strengthens the difficulties encountered since the emergence of the Pandemic of Covid-19. Because if African countries have generally suffered less on the health level, it is quite different from an economic point of view, the continent having experienced an unprecedented leap in poverty, but also food distress.
“There is a slowdown but, more problematic still and above all more harmful, there is the increase in food prices and energy, worries Abe Selassie, director of the Africa department to the IMF. Very difficult situation for the poorest and most vulnerable. If the situation is arduous in many regions, it is even more problematic in Africa. “According to the World Bank, sub -Saharan Africa now concentrates 60 % of the world’s extreme poverty , with 390 million people, more than the combined population of its two most populated states, Nigeria and Ethiopia.
Now to eliminate extreme poverty by the end of the decade, each country in the region should experience an annual economic growth of 9 %, “a particularly high bar for countries including GDP growth per capita was on average 1.2 % during the decade preceding the pandemic, “said the World Bank. 2>
reduced budgetary margins
Difficult to invest and attract funding in a gloomy economic context, while investors turn to the safest investments while waiting for the monetary storm to pass. In addition, budgetary margins are currently reduced: the continent has experienced a global level of debt close to 60 % of its GDP, the highest threshold since the beginning of the century, according to the IMF. “Even before the pandemic, we insisted on the increase in public debt in the region. This situation was accentuated by the pandemic,” observes Mr. Selassie.
To face it, the institutions launched an appeal to the countries concerned: to turn quickly to them and especially not to wait for their financial situation to become too difficult. On October 7, David Malpass, the president of the World Bank, had thus alerted to the fact that “$ 44 billion in debt became due” in the poorest, mainly African countries, an amount greater than the aid international received by the countries concerned.
“If their level of debt is not sustainable, we cannot intervene, the countries must agree with their creditors. If we intervene when the debt is not viable, the resources that we would inject would go to the reimbursement of the debt rather than the fiscal policy, “explains Mr. Selassie.
Some countries have been able to restructure their debt, in particular thanks to the common negotiation framework set up by the G20. This is the case of Zambia, after two years of negotiations between the various creditors, in the forefront of which China. But, underlines Masood Ahmed, president of the Center for Global Development, “it is a very slow process and which does not work well while at the same time the countries in difficulty must wait and see the situation getting worse”.