World Bank’s Dabalen on risks that threaten Africa’s growth

The economic landscape in Africa is facing numerous challenges that are threatening the region's growth potential. Andrew Dabalen, Chief Economist at the World Bank, highlighted three key areas that need urgent attention to prevent further deceleration in economic advancement. These crucial concerns include poverty, price inflation, and production capacity. Dabalen expressed his concerns during an exclusive interview with CNBC Africa. In the interview, Dabalen pointed out that the global economic slowdown, high inflation due to conflicts like the war in Ukraine, extreme weather events in Africa, tightening financial conditions, and rising debt levels are contributing to the significant growth challenges in the region. These factors have led to a drop in expected growth rates from 4.1 percent to 3.3 percent. The impact of these challenges is exacerbating food insecurity, with millions of Africans facing acute food shortages and livelihood threats. Dabalen emphasized the urgent need for countries to address these intertwined crises as they are running out of financial resources to combat the issues effectively. He highlighted the importance of prioritizing inflation control, protecting vulnerable populations, and boosting production to close the gap between demand and supply in order to curb inflation. Dabalen also shed light on the World Bank's initiatives to support African nations facing economic turmoil. The World Bank has allocated $170 billion for a 15-month period to address climate adaptation, food security, education, healthcare, and water and sanitation needs. Additionally, the World Bank is advocating for debt relief measures to alleviate the financial burden on countries grappling with rising debt levels and mounting vulnerabilities. To complement the World Bank's efforts, Dabalen offered specific policy recommendations for African countries. He emphasized the need to focus on inflation control, safeguarding vulnerable households, and reprioritizing government funds towards investments that drive growth and development. Dabalen urged governments to invest in research and development, human capital, and infrastructure to generate future revenues. He also underscored the importance of deepening regional integration through initiatives like the African Continental Free Trade Area (AfCFTA) to enhance trade opportunities, attract investments, foster innovation, and promote job creation. Dabalen stressed that increased trade among African countries, especially in foodstuffs, could lead to substantial economic benefits and transformational outcomes. He urged African nations to remove trade barriers, build infrastructure, and collaborate on various initiatives to facilitate seamless integration and economic growth.