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Publication(Washington, DC: World Bank, 2023-10-04) World BankGrowth in Sub-Saharan Africa is expected to slow to 2.5 percent in 2023 from 3.6 percent in 2022. It is projected to increase to 3.7 percent in 2024 and 4.1 percent in 2025. However, in per capita terms, the region is projected to slightly contract over 2015-2025. The region faces many challenges, including a "lost decade" of sluggish growth, persistently low per capita income, mounting fiscal pressures exacerbated by high debt burdens, and an urgent need for job creation. Tackling these multifaceted issues requires comprehensive reforms to promote economic prosperity, reduce poverty, and create sustainable employment opportunities in the region. This will require an ecosystem that facilitates firm entry, stability, growth, and skill development that matches business demand.
Publication(Washington, DC: World Bank, 2022-04-13) Zeufack, Albert G. ; Calderon, Cesar ; Kabundi, Alain ; Kubota, Megumi ; Korman, Vijdan ; Raju, Dhushyanth ; Abreha, Kaleb Girma ; Kassa, Woubet ; Owusu, SolomonSub-Saharan Africa's recovery from the pandemic is expected to decelerate in 2022 amid a slowdown in global economic activity, continued supply constraints, outbreaks of new coronavirus variants, climatic shocks, high inflation, and rising financial risks due to high and increasingly vulnerable debt levels. The war in Ukraine has exacerbated the already existing tensions and vulnerabilities affecting the continent. Given the sources of growth in the region and the nature of the economic linkages with Russia and Ukraine, the war in Ukraine might have a marginal impact on economic growth and on overall poverty—as this shock affects mostly the urban poor and vulnerable people living just above the poverty line. However, its largest impact is on the increasing likelihood of civil strife as a result of food- and energy-fueled inflation amid an environment of heightened political instability. The looming threats of stagflation require a two-pronged strategy that combines short-term measures to contain inflationary pressures and medium-to-long-term policies that accelerate the structural transformation and create more and better jobs. In response to supply shocks, monetary policy in the region may prove ineffective to bring down inflation and other short-run options may be restricted by the lack of fiscal space. Concessional financing might be key to helping countries alleviate the impact of food and fuel inflation. Over the medium term, avoiding stagflation may require a combination of actionable measures that improve the resilience of the economy by shoring up productivity and job creation. Lastly, ongoing actions to enhance social protection—including dynamic delivery systems for rapid scalability and shock-sensitive financing—could be strengthened further to improve economic resilience against shocks and foster investments in productive assets.