S05 ATR February 2022 SSA prereview_ATR - New Master Template 2016 27/01/2022 08:23 Page 16
ECONOMY | REPORT
Africa needs concerted reform efforts Image Credit: Adobe Stock
Key challenges facing Africa in 2022 are the need to accelerate inclusive recovery through industrialisation, digitalisation, and prioritising infrastructure investments; reverse social inequality amid pandemic downturn; and ensure better economic governance.
Scaling up vaccinations, strong global trade rebound, and elevated commodity prices could strengthen the SSA economy.
G
rowth in sub-Saharan Africa (SSA) remains below global trend-growth (Table 1), leading to widening divergences. The region must grow twice as fast to regain ‘pre-crisis’ output by 2023. Scaling up vaccinations, strong global trade rebound, and elevated commodity prices could strengthen the regional economy. Multilateral support, which remains equally vital for SSA, faces additional external funding needs of US$425bn up to
2025, according to the International Monetary Fund (IMF).
World Output Advanced Economies Emerging & Developing Asia Emerging & Developing Europe South America & the Caribbean Middle East & Central Asis Sub-Saharan Africa Excl. South Africa & Nigeria
2020 -3.1 -4.5 -0.8 -2.0 -7.0 -2.8 -1.7 0.0
2021 5.9 5.2 7.2 6.0 6.3 4.1 3.7 3.7
2022 4.9 4.5 6.3 3.6 3.0 4.1 3.8 4.8
World Trade Volume* (goods & services) Crude Oil US$/barrel ** Non-Energy Commodity Price Index*
-8.2 41.3 3.0
9.7 71.5 22.5
6.7 79.4 2.5
Seeking greater resilience Structural reforms to address labour and product market rigidities and improving competition and logistics will help reallocate resources toward viable sectors, thus raising aggregate productivity growth. Educational systems should adapt to the evolving post-pandemic labour demand as technology fosters skilled jobs in
Besides macro-prudential policies, a vibrant economy requires a growthfriendly business climate.” 16
Table1: SSA's Growth Projections in context of Global Perspective (annual % change)
AFRICAN REVIEW OF BUSINESS AND TECHNOLOGY | FEBRUARY 2022
*Annual percent change; ** International Energy Agency forecast. Note: Africa's economy until the outbreak of global pandemic was on an upward trajectory. The Covid-19 downturn weighed on trade and foreign direct investment, which fell to US$30bn in 2020, along with a mounting toll on the region's social infrastructure and increased public debt levels. Sources: IMF, World Economic Outlook October 2021.
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