June 13, 2022

African economy upbeat despite pressures – Afreximbank

Afreximbank grows assets to $19bn


By Emma Ujah,  Abuja Bureau Chief

Ahead of next week’s Annual Meetings of the African Import-Export Bank (Afreximbank), the institution has assured that the region’s economy would be on upbeat in 2022, despite pressures.

The bank identified the post-COVID-19 and current Russian invasion of Ukraine as factors that would put a lot of pressures on the economies of African countries.

However, the regional body said in the report authored by the Chief Economist and Director of Research, Dr. Hypolite Fofack, that the region would witness a positive growth, with 16 countries (30%) expected to grow at more than 5 per cent.

The report was titled, ‘Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures’.

The report said, “Africa’s growth forecast for 2022 points to continued fortitude even in the face of heightening inflationary pressures and geopolitical risks. While other parts of the world have suffered sharp downward revisions, the IMF has maintained its growth expectations for Africa.

“Accordingly, Africa’s GDP is projected to expand by around 3.9% this year, slightly less than IMF’s earlier forecasts of around 4.3%, and our own forecast of 4.2%. In a sign of increasing resilience, the revised growth forecasts show that the economic expansion of 16 countries (representing around 30% of all African nations) will exceed 5% in 2022, with the asymmetric nature of the commodity price shock emerging as a major growth accelerator for some of the largest economies across the region.”

It added that despite the numerous, lingering negative effects of the pandemic – from global supply chain disruption and rising inflationary pressures to recurrent waves of COVID-19 infections and the emergence of threatening variants – the globalisation of growth resilience will emerge as one of the most important stories when economic historians reflect on this time.

“In a major and synchronised reversal, growth bounced back in 2021 in one of the strongest post-recession recoveries in decades.”

“Although the recovery rate was uneven across regions and countries (World Bank, 2021a; IMF, 2021a), output expansion was exceptionally strong in many advanced as well as emerging market and developing economies, the base effect notwithstanding,” the report said.

It added, “Botswana’s GDP, which expanded by 12.5%, making it the fastest-growing economy in Africa and one of the fastest-growing in the world, exemplifies these circumstances among developing economies.”

 “Even the region’s most affected tourism-dependent economies enjoyed strong rebound…”

The growth witnessed across the region, according to the bank, was made possible exceptional financial support it extended to African countries, setting new records for disbursements in the process, along with the International Monetary Fund (IMF)