The African Development Bank (AfDB) has cited that only Botswana and Zimbabwe are set to register a surplus in fiscal balance in the 2023/24 financial year.
According to its recently released 2023 Southern Africa Economic Outlook report covering 13 African countries in southern Africa, climate change, inflation, rising interest rates, and persistent global shocks have battered much of the countries in the region.
Moreover, the tightening of monetary policies in the United States and Europe has also resulted in rising interest rates, posing additional challenges for African countries, particularly in managing their debt service payments, according to the report.
“Subdued regional performance is linked to the lingering political and structural issues in South Africa, which drag down regional growth, as well as the impacts of Russia’ invasion in Ukraine, which continue to put pressure on energy and food prices,” said AfDB lead economist Ferdinand Bakoup.
In addition, Bakoup said South Africa is the worst performer in the southern Africa region over the 2023/2024 financial year.
However, Bakoup noted that that there will be a slight growth in 2024 across the southern African countries.
“Projected growth varies across southern Africa countries, reflecting in part a contrasting trend in the terms of trade and domestic structural issues.
In 2024, the region’s growth rate should slightly pick-up, though still posting the worst growth performance across the five sub-regions. Nevertheless, the regional growth rate is improving while it is expected to decrease in the oil exporting countries,” said Bakoup.
The AfDB has since emphasized the urgent need for enhanced green growth and climate resilience measures and the role of the private sector in mobilising financing for climate and green growth initiatives on the continent.
