World Bank downgrades Africa growth forecast
The World Bank has lowered its economic growth forecast for Sub-Saharan Africa (SSA), citing the collapse of Sudan’s economy due to its escalating civil war as one reason for the decision.
According to the global financial institution’s latest regional economic outlook report, the Africa Pulse, published on Monday, the region will likely grow by 3% this year, down from 3.4% projected in April.
“The downgrade is partly explained by the collapse of economic activity in Sudan caused by the armed conflict, which has destroyed physical and human capital as well as state capacity, with adverse impacts on food security and greater forced displacement,” the World Bank stated.
Sudan’s economy is projected to decline by 15.1% in 2024 before recovering slightly the next year with 1.3% growth. The northeast African country has been embroiled in a violent conflict since April 2023, with UN estimates putting the death toll in the thousands. Around 11 million people have been displaced.
Ahead of the report’s release, the World Bank’s chief economist for Africa told reporters on Friday that without the Sudanese conflict, regional growth in 2024 would have been 3.5% higher and in line with the initial April estimate.
“So that’s how much this is knocking off the regional growth rate,” Andrew Dabalen said, adding that “Sudan, the economy, has basically completely disappeared.”
Regardless, the Washington-based lender expects economic growth in 1.24 billion-strong SSA to accelerate to 4% in 2025 and 2026. This will be driven by an expected boost in private consumption and investment, owing to lower interest rates as the region’s inflation rate falls to 4.8% this year from 7.1% in 2023.
The institution also expressed concern about the region’s per capita growth, claiming that it has not been sufficient to reduce extreme poverty. It stated that SSA’s real income per capita in 2024 is about 2% lower than it was in 2019 before the COVID-19 pandemic.
“The number of poor people increased from 448 million in 2022 to 464 million in 2024,” it stated.
“The high cost of living, corruption, and, more broadly, weak governance have triggered protests and palpable anger among the youth in Kenya, Nigeria, and Uganda – unrest that could spread throughout the region,” the World Bank warned.
