Africa’s Macro-Economic Performance and Outlook 2023: Leaders pledge urgent action to sustain recovery and build resilience

African leaders have pledged to take immediate action to integrate the recommendations from the newly released Africa’s Macro-Economic Performance and Outlook report into their national development plans.

Zambian President Hakainde Hichilema said the study, conducted by the African Development Bank Group, provided an impetus for the continent’s leaders to forge ahead with needed reforms. His remarks were read on his behalf by Zambia’s Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, during an event to present the report at the 36th African Union Summit in Addis Ababa.

The Zambian president described the report as a significant milestone in the quest for evidence-based knowledge to inform policymaking for a more prosperous and sustainable future for Africa.

“The findings of this important report, therefore, provide us with a set of concrete policies that we must urgently implement to sustain the recovery and build resilience in Zambia, and on the continent more generally,” President Hichilema stressed. He observed that although Zambia was not spared from global shocks, the country’s economy has shown resilience.

He also acknowledged the impact of Zambia’s heavy debt burden on the country’s fiscal stability and said his administration had launched reforms that would spur economic growth to 4.0 percent in 2023 and 4.3 percent in 2024.

The African Development Bank Group released the inaugural Africa’s Macroeconomic Performance and Outlook report  on January 19.  It has since attracted significant interest among decision-makers in Africa and globally.

The biannual report offers policymakers, global investors, researchers, and other development partners, up-to-date, evidence-based assessments of the continent’s recent macroeconomic performance. It also provides a short-to-medium-term outlook.

In his opening remarks, African Union Commission Chairperson Moussa Faki Mahamat told participants that the report would be presented to heads of state at the African Union Summit to help steer national planning.

“Knowledge is power. The report, to be published twice a year, is a wealth of knowledge – with deep insight into what is going on in Africa in the macroeconomic sphere. It identifies challenges and opportunities for the good of our continent,” he said.  “If governments, the private sector, and other stakeholders adopt the report, they will be better placed to make informed decisions.”

The report calls for timely structural reforms to enhance government-enabled private-sector industrialization in key areas.

Nigeria’s Minister of Finance, Budget, and National Planning Zainab Ahmed said: “All the issues raised in the report affect our country as well. We have steered the country towards pre Covid-19 era, but we still face some challenges.”

Ahmed said: “We have been asking for a liquidity facility as part of the SDRs (Special Drawing Rights) to act as a cushion for us. We have also asked multilateral development banks to give us longer-term financing. Nigeria has shown a lot of resilience. We just need that support to enable us to take the full potential.”

African Development Bank President Akinwumi Adesina observed that although African economies have shown impressive resilience, global support is needed to help the continent navigate financial burdens and its security challenges.

“Despite the slowdown occasioned by multiple shocks, Africa demonstrated continued resilience in all but one country and maintained a positive growth rate in 2022 with stable outlook in 2023 and 2024.  African economies are indeed resilient,” Adesina said.

He called for strong and collective support to Africa to help the continent navigate the challenges it faces, especially debt burden and debt vulnerabilities.

The bank president explained further: “Africa cannot run up the steep hill carrying a bag of debt on its back. The channeling of the additional $100 billion of Special Drawing Rights will make a huge difference. We must join hands to harness the enormous opportunities in Africa. There is no doubt that we will make good progress.  However, we must work fast, be inclusive, and be competitive.”

Also speaking, Assistant Minister of Finance for Policies and Economic Affairs of Egypt, Dr. Mohammed Ibrahim, said the report is helpful for African policymakers and researchers as a timely databank of sound and evidence-based projects for development and planning.

In a presentation, the Director of the Center for Sustainable Development, Columbia University, Prof. Jeffrey Sachs, said that Africa had the capacity to achieve 7- 10 % yearly growth.

He observed that Africa could take advantage of its population to grow a robust single market, citing examples like China and India.

“Building a single market will enable Africa to position among the three largest global marketplaces. The continent has the greatest growth potential,” he said, challenging African leaders to build vital regional infrastructure and close the infrastructure gaps over the following decades.”

He urged governments to lead a revolution to bring about affordable access to health care and education. Sachs called for greater financing for the continent to place it on sustainable growth, observing that the African Development Bank is critical to meeting the continent’s financial needs.

“The African Union needs to become a permanent of the G-21,” he added.

Acting Chief Economist and Vice President of the African Development Bank, Prof Kevin Urama, highlighted the importance of Africa’s Macroeconomic Performance and Outlook 2023.

He said: “As we gather here today, global macroeconomic conditions have become increasingly uncertain due to multiple overlapping shocks that make policymaking and investment decisions very challenging. Countries need regular diagnostics and focused policy actions to address these recurring and overlapping shocks.”

Professor Urama affirmed that Africa remains the place to invest despite suffering global shocks.

What the 2023 Africa’s Macro-Economic Performance and Outlook  report says

Following two years of global shocks, the report notes that African economies are set to overcome various domestic and global shocks  and return to a path of economic recovery, stability, and growth. 

The lingering effects of the Covid-19 pandemic, the ravages of accelerating climate change, and the impact of rising geopolitical conflicts and tension slowed Africa’s growth to an average of 3.8% in 2022.

To sustain growth, Africa’s economies will require comprehensive information and insights to navigate a labyrinth of intertwined global risks, the report stated.

The bank will release the report in the first and third quarters of each year to complement its flagship Annual African Economic Outlook. The African Development Bank is the first institution to release a macroeconomic outlook for Africa for 2023.

*AfDB