By Daniel Itai
African Development Bank (AfDB) has forecasted Surplus Only for Botswana and Zimbabwe in 2023/24 Fiscal Year Amidst Economic Challenges in Southern Africa.
The recently released 2023 Southern Africa Economic Outlook report by the AfDB sheds light on the economic situation of 13 African countries in the southern region, revealing that only Botswana and Zimbabwe are expected to achieve a surplus in their fiscal balance for the 2023/24 financial year.
The report attributes this challenging economic landscape to several factors, including climate change, inflation, rising interest rates, and persistent global shocks, which have adversely affected many countries in the region.
The tightening of monetary policies in the United States and Europe has further compounded the situation, leading to an increase in interest rates.
Consequently, African countries are facing additional difficulties in managing their debt service payments.
AfDB lead economist, Ferdinand Bakoup, highlighted that South Africa’s lingering political and structural issues are dragging down regional growth.
Additionally, the impacts of Russia’s invasion of Ukraine are putting pressure on energy and food prices, adding to the region’s economic woes.
Bakoup revealed that South Africa ranks as the worst performer in the southern Africa region for the 2023/2024 financial year.
However, there is a glimmer of hope, as the report projects a slight growth across the southern African countries in 2024. This growth variation is influenced partly by the contrasting trends in terms of trade and domestic structural issues among these nations.
“While the region’s growth rate is expected to slightly pick up in 2024, it remains the weakest among the five sub-regions. On the other hand, oil-exporting countries are anticipated to experience a decrease in growth,” stated Bakoup.
The AfDB emphasizes the urgent need for enhanced green growth and climate resilience measures in the region. It also underscores the crucial role of the private sector in mobilizing financing for climate and green growth initiatives across the African continent.
These measures are vital to address the economic challenges faced by the region and foster sustainable development in the years to come.
