The World Bank has said Rwanda will outgrow Nigeria, South Africa and all other African countries in 2022 despite the projected slow pace of growth when compared to 2021.
In its latest economic report titled “Stagflation Risk Rises Amid Sharp Slowdown in Growth”, the world’s leading multilateral financial institution said Rwanda’s economy is expected to grow at a 6.8% rate, the highest for any African nation in 2022 while in 2023 and 2024 it will expand at 7.2% and 7.4%, respectively.
In 2021, the economy grew at 10.9% to exceed its 9.5% pre-pandemic growth rate recorded in 2019. Also, the second-largest growth rate achieved in Africa in 2021. Botswana was the biggest at 12.1%.
However, Africa’s largest economy Nigeria was estimated to grow at 3.4% in 2022, largely due to rising oil prices. Global uncertainty amid Russia-Ukraine, Nigeria’s 2023 General Elections and emerging economies are expected to weigh on the economy in 2023 and 2024, containing the nation’s growth rate at 3.2% in the two following years.
Growth in South Africa, the second-largest economy in Sub-Saharan Africa, is projected to remain largely subdued at 2.1% in 2021. In 2023 and 2024, World Bank predicted that South Africa would grow at 1.5% and 1.8%, respectively.
Sub-Saharan Africa (SSA) region will grow at a 3.7% rate in 2022, down from 4.2% in 2021. The bank said the decline in the region will be caused by domestic price pressures partly induced by supply disruptions owing to the war in Ukraine, are reducing food affordability and real incomes, especially in low-income countries (LICs).
“Growth in SSA is expected at 3.7 percent in 2022 and 3.8 percent in 2023 – on par with January projections. Yet, excluding the three largest economies, growth was downgraded by 0.4 percentage point both in 2022 and 2023. Although, elevated commodity prices would underpin recoveries in extractive sectors, in many countries rising inflation would erode real incomes, depress demand, and deepen poverty,” World Bank stated.
“Growth in low-income countries (LICs) was revised down by almost a full percentage point this year as food price inflation and food shortages are expected to take a particularly severe toll on vulnerable populations, further worsening food insecurity in those countries.”