UN and WTO Agree That 2023 Will See a Slump in the Global Economy – But The AfDBank is Optimistic for Africa

A series of severe and mutually reinforcing shocks — the COVID pandemic, the invasion of Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency — battered the world economy in 2022. As a result world output growth is projected to decelerate from an estimated 3.0% in 2022 to 1.9% in 2023, marking one of the lowest growth rates in recent decades, according to the United Nations World Economic Situation and Prospects (WESP) 2023.

Meanwhile, according to the latest WTO Goods Trade Barometer issued on 1 March, world merchandise trade growth appears to have lost momentum in the fourth quarter of 2022 and is likely to remain weak in the first quarter of 2023,. The overall barometer index continues to point to weakening trade growth in volume terms after falling to 92.2, down from 96.2 in the previous release and well below the baseline value of 100.

However, a report, ‘Africa’s Macroeconomic Performance and Outlook’, released on Jan 19, by the African Development Bank Group (AfDB) estimated that “growth across all five African regions was positive in 2022 and the outlook for 2023–24 is projected to be stable.” The projections are higher than expected global forecasts (2.7% and 3.2% respectively) for the same period. Africa’s top 5 performing economies before COVID are expected to grow by over 5.5% on average in 2023-2024 and reclaim their position among the world’s 10 fastest-growing economies. Those include Rwanda, which is projected to grow by 7.9%, Côte d’Ivoire by 7.1%, Benin by 6.4%, Ethiopia by 6.0%, and Tanzania by 5.6%. According to the report, the AfCFTA has the potential to create a competitive continental market that will cushion the continent from multiple shocks.