African Economic Outlook 2022

The theme of the 2022 African Economic Outlook is Supporting Climate Resilience and a Just Energy Transition in Africa.

The theme highlights climate change as a growing threat to lives and livelihoods in Africa and mirrors the theme of the 2022 Annual Meetings.

Despite having 17% of the current global population, Africa has accounted for a negligible 3% of cumulative worldwide CO2 emissions historically. However, climate change and extreme weather events disproportionately affect Africa, with severe economic, social, and environmental consequences for its people.
The African Economic Outlook makes it clear that the pandemic and the Russia-Ukraine war could leave a lasting impression over several years, if not as much as a decade. Meanwhile, around 30 million people in Africa were pushed into extreme poverty in 2021 and about 22 million jobs were lost in the same year because of the pandemic. And the trend is expected to continue through the second half of 2022 and on into 2023.
The economic disruptions stemming from the Russia-Ukraine war could push a further 1.8 million people across the African continent into extreme poverty in 2022. That number could swell with another 2.1 million in 2023.
The continent’s additional financing needs for 2020-22 are estimated at $432 billion. Financing African countries’ nationally determined contributions—public pledges from countries on how they plan to play a part in post-2020 collective action on climate change—will require up to 1.6 trillion between 2022 by 2030. The continent loses between 5% and 15% of gross domestic product to climate change. Collectively, African countries received only $18.3 billion in climate finance between 2016 and 2019. This leaves a climate finance gap of up $1288.2 billion annually from 2020 to 2030.

Chapter 1: Africa’s economic performance and future Prospects

Chapter 1 evaluates Africa’s recent growth performance and medium-term growth projections, as well as the risks to future growth on the downside and upside. It also looks at current macroeconomic events and fundamentals, such as inflation, the exchange rate, and the financial sector. It will also explore changes in Africa’s external financial flows, with a focus on remittances, tourism, portfolio flows, foreign direct investment (FDI), and official development aid (ODA).

In addition, the chapter discusses current accounts and international reserve levels, as well as the state of the balance of payments. It includes a discussion of the Covid-19 immunization program in Africa.

Chapter 2: Climate resilience and energy transition

This chapter looks at Africa’s climate vulnerabilities, the socioeconomic impacts of climate change, and potential trade-offs in different energy transition scenarios. The chapter offers factual evidence on climate change’s macroeconomic and sectoral socioeconomic ramifications, as well as a more nuanced assessment of the impacts on poverty, employment, and other key socioeconomic outcomes.

The chapter also assesses the scope of climate resilience and adaptation strategies at various levels, as well as the challenges and opportunities presented by these strategies.

Chapter 3: Financing climate resilience and a just energy transition: New strategies and instruments

Chapter 3 looks at the current financial choices available to African countries to help them achieve climate resilience and a just energy transition by mid-century, as well as new and innovative financial strategies and instruments. It examines the current state of climate financing in Africa, including both mitigation and adaptation, at the local, national, and global levels.

It examines past and present economic policy, legal and institutional frameworks for funding climate-resilient programs and promises, as well as challenges and lessons learned. It also assesses the direct and indirect effects of climate finance on the budgetary demands of the Sustainable Development Goals.