By Steve Agbota
The United Nations Conference On Trade And Development (UNCTAD) has disclosed that additional 58 million Africans will fall into extreme poverty in 2022.
This, according to UNCTAD report 2022, would add to the 55 million already pushed into extreme poverty by the COVID-19 pandemic.
It stated that the situation was as a result of Africa’s economic activity which is expected to expand by a moderate 2.7 per cent in 2022 and 2.4 per cent in 2023, following a rebound of 5.1 per cent in 2021.
UNCTAD Secretary-General Rebeca Grynspan, said: “The economic slowdown causes further setbacks in the realisation of the 2030 Agenda for Sustainable Development.”
According to the report, almost 60 per cent of Africa’s low-income countries are already in debt distress or at high risk of it, as debt levels, both private and public, stand at record levels.
Besides, more than 60 per cent of African countries need external assistance for food, with hunger further spreading across the continent.
UNCTAD says the sharp economic slowdown reflects several new challenges. These include high international food and fuel prices, financial shocks owing to the stronger-than-anticipated tightening of monetary policy in advanced economies and acute risks of food insecurity in many parts of the region.
Such recent negative shocks have piled up on top of the economic and social strains of two consecutive years of the pandemic.
Though the aggregated growth figures mask a broad heterogeneity within African countries, growth prospects on the continent have deteriorated across the board.
This is partly reflected in the growth trajectory of its three largest economies, Nigeria, Egypt and South Africa, which altogether account for roughly 60 per cent of Africa’s gross domestic product.
In Nigeria, the economy grew 3.1 per cent, year on year, in the first quarter of 2022, compared with 4.0 per cent in the fourth quarter of 2021. This marks the sixth consecutive quarter of economic expansion.
The continuous growth in the non-oil sector – specifically, in the services and agriculture subsectors – was the main driver of this expansion. In 2022, Nigeria’s economy is expected to grow 2.9 per cent, as a result of weak oil output caused by technical and security hurdles in a context of underinvestment.
In Egypt, economic activity continued to expand relatively quickly in early 2022, driven by tourism, non-petroleum manufacturing and trade. Yet the country made a request to the International Monetary Fund (IMF) for a new programme in March 2022 when it came under new financial pressure.
For the rest of the year, economic activity is expected to soften owing to the negative spillover of the war in Ukraine, leading to an annual growth forecast of 4.0 per cent.