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Nigeria, South Africa, Egypt slowing regional growth, says World Bank

The underperformance of Nigeria, South Africa, Egypt and other African big economies is slowing down the continent’s economic growth, the World Bank has said.

The global bank also identified high inflation and a sharp deceleration of investment growth as other reasons African countries are recording slow growth.

The World Bank noted that in the face of dampened growth prospects and rising debt levels, African governments must sharpen their focus on macroeconomic stability, domestic revenue mobilisation, debt reduction and productive investments to reduce extreme poverty and boost shared prosperity in the medium to long-term.

Relatedly, in the latest Africa’s Pulse, the World Bank projected that economic growth in Sub-Saharan Africa is expected to slow from 3.6 per cent in 2022 to 3.1 per cent this year.

In his comments on the report, the World Bank Chief Economist for Africa, Andrew Dabalen, said: “Weak growth combined with debt vulnerabilities and dismal investment growth risks a lost decade in poverty reduction. Policymakers need to redouble efforts to curb inflation, boost domestic resource mobilisation and enact pro-growth reforms while continuing to help the poorest households cope with the rising costs of living.”

The report said debt distress risks remain high with 22 countries in the region at high risk of external debt distress or in debt distress as of December 2022.

The report found that countries could potentially more than double the average revenues that they currently collect from natural resources, saying tapping the resources in the form of royalties and taxes while continuing to attract private sector investment requires the right kinds of policies, reforms and good governance.

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