Harare — The 2023 Southern Africa Economic Outlook, just issued by the African Development Bank (AfDB), paints a gloomy picture of the region's economic prospects.
According to the South African Broadcasting Association, the top development financier on the continent forecasts a woeful growth rate of 1.6% for this year and blames the slump on chronic global shocks that are still having an effect on economies all throughout Africa, including climate change, inflation, increasing interest rates, and rising prices.
The Southern African area, which includes 13 nations, has been most hit by the Covid-19 pandemic's aftermath. Very little economic development has been seen over the previous two years, and it is predicted to continue on a sluggish path.
George Kararach, the African Development Bank's chief economist, has reportedly warned that growth in Southern Africa is projected to dip down to around 1.6% in 2023 before slightly picking up in 2024 to reach about 2.7%.
It is however noteworthy that only Botswana and Zimbabwe are anticipated to post a surplus in their fiscal balance from 2023 to 2024, according to the report.
The impact of climate change on the region's economic growth cannot undervalued. Kevin Chika Urama, the AfDB's vice president of economic governance and knowledge management, has emphasised how the burden has been increased by climate change in addition to inflation brought on by rising energy commodity prices and supply chain disruptions.
Additionally, the tightening of monetary policy in the U.S. and Europe has led to an increase in interest rates, according to the report, creating new difficulties for African nations, especially in managing their debt servicing obligations. The AfDB has also emphasised the urgent requirement for improved green growth and climate resilience strategies in response to these diverse issues, drawing attention to the role played by the private sector in securing funding for climate change and green growth programs across Africa.
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In order to drive transformational action and close the climate financing gap at the regional level, Kararach emphasised that challenges with insufficient institutional capacity and weak governance have stymied advancement in these areas.
The AfDB has suggested policy measures to address the climate vulnerability of the continent and to lessen the effects while fostering economic growth. According to the AfDB, the region's 13 nations will need to contribute U.S.$90.3 billion yearly to reach this goal. The bank emphasised the crucial role played by the private sector in supporting climate action and green growth efforts in the area, while also acknowledging the difficulties in reaching this aim.
Africa has long suffered the devastating impacts of climate change, despite contributing little to the climate crisis, according to the United Nations Food and Agriculture Organization (FAO). Levels of poverty, the lack of economic opportunities, and unemployment are key factors increasing the likelihood of conflict, and there has been strong agreement that climate change is a major driver of violent conflict.
As the United Nations Framework Convention on Climate Change prepares for its annual Conference of Parties (COP) in Dubai, United Arab Emirates in November 2023, many African countries are looking to the event as an opportunity to advance their climate agendas and push for stronger global action on climate change.
