Accra: The African Continental Free Trade Area (AfCFTA) is identified as a pivotal opportunity for enhancing trade and economic growth across Africa, highlighted by the World Bank amidst ongoing trade tensions. The institution has urged African governments to foster an enabling environment that allows for expanded intra-continental trade by making their markets more accessible to one another.
According to Ghana News Agency, the World Bank's 31st edition of the Africa's Pulse report reveals that Sub-Saharan Africa is grappling with increased uncertainty, partly due to shifting trade dynamics, regional conflicts, and the impact of climate change on agriculture and livelihoods. The report underscores the potential of AfCFTA in diversifying and liberalizing markets, thereby boosting regional trade, expanding economic activity, and generating employment opportunities for Africa's youth.
The report, titled 'Improving Governance and Delivering for People in Africa,' emphasizes the resilience of economic growth in the region despite global economic uncertainties and limited fiscal space. It projects a growth of 3.5 percent for 2025, with expectations of an increase to 4.3 percent in 2026 and 2027, driven by rising private consumption and investments as inflation stabilizes and currencies strengthen. These projections align closely with those of the International Monetary Fund (IMF), forecasting a growth of 3.8 percent in 2025, further improving to 4.2 percent in 2026.
However, the World Bank cautions that the current growth trajectory is insufficient to significantly alleviate poverty and meet the aspirations of the populace. It stresses the necessity for urgent reforms to align growth opportunities with the creation of 'good jobs' for the burgeoning young workforce. Andrew Dabalen, World Bank Chief Economist for the Africa Region, points out the disparity between public aspirations and market realities, emphasizing the need for reforms that promote competition, transparency, and accountability to attract private investments, increase public revenue, and enhance economic opportunities.
The report also highlights challenges such as high debt levels and decreasing global aid, with real income per capita expected to fall below the peak of two percent seen in 2015 by 2025. It advises African nations to capitalize on opportunities to improve government spending efficiency, enhance access to essential services like health, education, water, and electricity, and establish fair tax systems and clear market rules to foster business growth and job creation.