According to the African Development Bank, North African nations should give green growth a high priority since they are expected to see somewhat higher economic growth in 2023 and 2024, reaching 4.6% and 4.4%, respectively. On Thursday, July 27, the pan-African organization released its 2023 North Africa Economic Outlook study in Tunis, with the topic, “Mobilizing Private-Sector Financing for Climate and Green Growth in Africa.”
The Bank Group claims that the region’s growth is mostly fueled by the service sector, especially commerce, and tourism. In comparison to 2021, when the region’s growth was 5.4%, 2022 had a mild 4.1% growth.
However, Audrey Verdier-Chouchane, Bank Group Regional Economist for North Africa and acting director of the Country Economics Department for Central Africa, North, and West Africa, who delivered the study, noted that there are considerable differences across nations in terms of the pace of growth.
“To sustain inclusive growth, the region should implement structural reforms that support the development of the private sector, improve productivity and employability, and create job opportunities,” stressed Ms. Verdier-Chouchane.
In the area, inflation is expected to reach double digits (14.2 percent) in 2023 before decreasing to 6.9% in 2024. The regional budget deficit is expected to remain at 3.5% of GDP in 2023 and 3.2 percent in 2024. The balance of payments deficit in the area is predicted to reduce to 0.5 percent of GDP in 2023 and 0.2 percent in 2024. According to the African Development Bank, the global economic climate, including the price of fossil fuels, trade structure, tourism, and foreign direct investments, will have an impact on the region’s external position.
Through targeted public investment, the African Development Bank advises coordinating monetary and fiscal policies to keep the region’s economy afloat, combat increased inflation, and safeguard small enterprises and communities. Similarly, preserving and promoting regional food security is a vital goal. Countries in the region should invest in agriculture, namely in the development of better varieties, as well as in water and soil management measures. According to the Bank, the region must increase its resilience, particularly in the areas of the energy transition, water management, and food security.
Finally, governments are asked to continue efforts to enact reforms to address budgetary issues, notably by boosting the digitalization of the tax administration system, growing the revenue base, rationalizing public expenditure, and strengthening governance mechanisms.
Source: Business Insider
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