AfDB expects growth in North Africa to reach 4.6%

Growth in North Africa is expected to rise from 4.1% in 2022 to 4.6% in 2023 and 4.4% in 2024, according to the African Development Bank's (AfDB) 2023 African Economic Outlook forecast. In 2023, the increase will come largely from strong recoveries in Morocco and Libya, the former after a devastating drought, the latter due to fluctuating oil production, explained the report presented at a press conference held on Wednesday by the AfDB in Sharm el-Sheikh, Egypt, on the occasion of the 58th Annual Meeting of the Board of Governors of the AfDB Group and the 49th Annual Meeting of the African Development Fund. Africa's real gross domestic product (GDP) growth was estimated at 3.8% in 2022, down from 4.8% in 2021. This slowdown in growth was mainly attributed to tighter global financial conditions and supply chain disruptions exacerbated by Russia's invasion of Ukraine, which dampened global growth. Growth was also affected by the residual effects of the COVID-19 pandemic, as well as the increasing impact of climate change and extreme weather phenomena. Despite these factors, African economies are still resilient to shocks, the report said, forecasting average growth of 4.1% between 2023 and 2024. The report stressed that the growth forecast is subject to significant downside risks, including sluggish global growth which, if it weakens further, could affect demand for African exports, in addition to continued tight global financial conditions, which have exacerbated debt servicing costs, and huge losses and damage due to climate change. //Climate finance needs in Africa are estimated at US$2.8 trillion over the 2020-2030 period The AfDB's African Economic Outlook 2023 report highlighted the importance of accelerating climate action and the green transition to promote comprehensive and sustainable growth on the African continent. Private finance flows for climate action in Africa have not matched the continent's needs. Between US$2,600 and US$2,800 billion is needed by 2030 to implement the continent's climate action ambitions, as expressed in the Nationally Determined Contributions (NDCs) submitted by April 2023. On an annual basis, this amounts to between US$234.5 billion and US$250 billion. Private climate finance in Africa is therefore expected to increase by about 36% per year. The report also highlights the important role of natural capital in Africa, which amounted to US$6.2 trillion in 2018, in closing the climate finance gap and promoting green growth. Thus, through sustainable management, the continent's significant natural capital can be transformed into financial assets to complement climate adaptation financing and mitigation, as well as into investments that enhance the transition to green growth. The Bank has recommended that countries on the continent put in place appropriate policies and mechanisms, including financial mechanisms, to better understand the true value of Africa's natural capital and promote local content and value addition. In the same context, the AfDB called for institutional capacity building to address governance gaps that prevent the continent from fully exploiting the potential of its natural resources, as well as the creation of regional value chains and markets to benefit from synergies between regions. The 58th Annual Meetings of the AfDB started on Tuesday, under the theme " Mobilising Private Sector Finance for Climate and Green Growth in Africa ", with the participation of about 4,000 participants from 81 countries. The African countries participating in these annual meetings, from May 22 to 26, 2023, in Sharm el-Sheikh in Egypt, aiming to urge the private sector to increase climate financing to implement green projects and sustainable agriculture. These meetings aim to intensify efforts to raise awareness of the importance of raising private climate finance in Africa, which is the lowest in the world, especially since it does not exceed 14% of total climate finance on the continent, while the rate of the private sector's contribution to climate investments in the world reached 49%.

Source: Agence Tunis Afrique Presse