Sub-Saharan Africa

Macro Poverty Outlook
Country-by-country Analysis and Projections for the Developing World

SpringMeetings2024

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Sub-SaharanAfricaAngolaBenin
Botswana
Burkina Faso
BurundiCabo Verde
Cameroon
Central African Republic
Chad
Comoros
Congo, Dem. Republic
Congo, RepublicCôte d'Ivoire
Equatorial Guinea
Eritrea
Eswatini
Ethiopia
Gabon
Gambia, The
Ghana
GuineaGuinea-Bissau
Kenya
Lesotho

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Apr 24

Liberia
Madagascar
MalawiMali
Mauritania
Mauritius
Mozambique
Namibia
Niger
Nigeria
RwandaSão Tomé and Príncipe

Senegal
Seychelles
Sierra Leone
SomaliaSouth Africa
South Sudan
Sudan
Tanzania
Togo
UgandaZambiaZimbabwe

ANGOLAKey conditions andchallenges

Table 1

2023

Population, million

36.1

GDP, current US$ billion

92.2

GDP per capita, current US$

2549.9International poverty rate ($2.15)

a

31.1
a

52.9

a

78.0

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

51.3

School enrollment, primary (% gross)

b

88.6

b

61.6

Total GHG emissions (mtCO2e)

110.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

In 2023, lower oil production and an exchange rate shock led to economic stagnation. The May-June currency slide continues to fuel inflationary pressures. Lower tax revenues, larger interest payments
and higher fuel subsidies led the government to cut other expenses. The non-oil
sector would drive growth since 2024,
but risks to the outlook remain high due
to over-reliance on oil. Poverty is projected to grow marginally to 36.1 percent.

Angola’s economy remains overly dependent on the oil sector, which accounts for a quarter of GDP, 60 percent of tax revenues, and 95 percent
of exports. Oil production is in structural decline due to oil depletion andlack of investment, falling from 2 million to 1.1 million barrels per day between 2010 and 2023. The reliance on
oil has led to high vulnerability to external shocks, undermining macroeconomic stability, and stunted the nonoil economy through strong real exchange rate appreciation, limiting economic diversification and job creation.
Among those employed, 80 percent are
informal, and half are either self-employed with no employees or unpaid
workers of family enterprises. Women
face higher unemployment and are
more likely to be informal (89 percent
compared to 72 percent for men).
Progress has been made in enhancing
macro-fiscal stability through exchange
rate liberalization, central bank autonomy, and fiscal consolidation. However,while these efforts should be accelerated,
greater economic diversification is needed to boost economic growth and reducepoverty, particularly in the context of the
global energy transition. Between 2015
and 2022, real GDP per capita fell by 28
percent, reinforcing the need for a morediversified and inclusive growth strategy.

Angola’s poverty rates stand above what
would be expected for a country with its
GDP level: as of 2018, a third lived on lessthan $2.15 per day. Building human capitalis a key priority for reducing poverty andboosting growth. Limited access to healthand education reduces the productivity ofan Angolan child to a third of his or her potential. Important progress is being madein building a social safety net, including
the flagship cash transfer program Kwenda that has registered 1.5 million rural
households and initiated payments to 1.03
million beneficiaries. Yet, urban households remain uncovered and vulnerable tofood price shocks.

Recent developments
The 2023 real GDP growth has been revised downward from 1.3 to 0.8 percent
since the previous MPO. Oil production
in 2023 (1.11 million b/d) fell short of
the government’s expectations (1.18 million b/d) due to a longer-than-expected maintenance shutdown at a major oilfield. The non-oil sector slowed down
due to a cost-push shock to key inputs
from a one-off adjustment in gasoline
prices and a sharp currency depreciation.
The economic stagnation reduced government revenues, especially those fromthe non-oil sector.
The value of oil exports fell by 27 percent
in 2023 due to lower oil prices and production. This, together with large debt
service payments, reduced the supply of
foreign currency, which triggered a

FIGURE 1 Angola / Real GDP growth and contributions toreal GDP growth

FIGURE 2 Angola / Actual and projected poverty rates andreal GDP per capita

Percent, percentage points
6

Poverty rate (%)

480

Real GDP per capita (constant LCU)

90

70000
60000

70

2

50000

60

0

50

40000

-2

40

30000

-4

30

20000

20

-6

10000

10

-8
2020
2021
Agriculture
Services

2022

2023e
2024f
Oil industry
GDP

0

2025f
2026f
Non-oil industry

02008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Sources: Angola National Institute of Statistics and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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40 percent depreciation in May-June 2023
and widened the gap between the official
and the parallel exchange rates. The slidein the kwanza resulted in higher-than-expected interest payments and fossil fuelsubsidies, to which the government responded with cuts in other expenses. The
depreciation has also fueled inflationarypressures as year-on-year inflation soared
from 11.5 percent in February 2023 to 24
percent in February 2024. The increase ingasoline prices in June 2023 further fueled
inflation. The National Bank of Angola
raised its policy rate by 100 basis points
to 18 percent in November and then to
19 percent in March.
The economy is not generating enough jobs
to keep up with Angola’s growing working
age population. Between Q4 2022 and Q42023, over 550,000 new workers joined thelabor force, but only 10,000 jobs were added.
Urban and youth unemployment surged to
42 and 58 percent in Q4 2023, respectively,
up from 39 and 53 percent a year earlier.
While the share of jobs in the primary sector grew by 1.1 percentage points, jobs incommerce fell by 2.5 percent.

Outlook
Growth is expected to rebound to 2.8 percent in 2024 and then remain at similar
rates. Non-oil sectors would drive this recovery, as oil production is projected tofall by 2.5 percent in 2024 and then stagnate due to oil depletion and lack of investment. Hence, on the demand side, exports are expected to stall, while both final
consumption and gross fixed capital formation drive growth. Achieving higher
growth rates will depend on the efforts todiversify the economy.
Year-on-year inflation is projected toreach around 28 percent by mid-2024 andthen decline to around 12 percent by
end-2026. Monetary policy tightening, together with a conservative fiscal stance,
is expected to contain inflationary pressures. In addition, the stock of international reserves (7 months of imports), andthe imminent monetary loosening in the
US would reduce downward pressureson the kwanza and, thus, on inflation.

TABLE 2 Angola / Macro poverty outlook indicators

Food inflation, combined with a weakening labor market and a decline in percapita growth, suggests that poverty may
increase to 36.1 percent in 2024, whichcorresponds to almost 13.5 million Angolans living on less than $2.15/day.
The economic outlook faces several
downside risks, primarily driven by lower-than-expected oil prices and production. Lower oil revenues could lead to
additional public spending cuts, impacting economic growth, and greater inflationary pressures resulting from a weaker currency. Further monetary tightening
to combat inflation would also delay the
economic recovery. Increasing efforts todiversify the economy has become essential to reduce the impact of oil pricevolatility on public finances, economic
performance, and poverty reduction. In
the near term, it will also be important toaddress food insecurity, tackle high unemployment, especially among the urban
poor, and protect against human capital deterioration by ensuring that all Angolan children have access to adequate
nutrition, medical care, and education.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.2
4.0
-2.9
7.4
-8.6
-3.8

2022
3.0
5.4
3.6
8.1
3.3
26.1

2023e
0.8
2.3
-15.3
4.6
-2.8
-7.3

2024f
2.8
4.6
5.1
1.4
-2.5
-3.3

2025f
2.7
4.0
2.7
2.7
0.0
2.2

2026f
2.4
3.0
2.4
2.8
0.0
1.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-0.1
17.2
-8.3
6.2

3.1
3.9
1.8
4.2

0.8
0.6
-1.3
2.8

2.6
6.3
0.1
4.2

2.6
4.8
1.0
3.6

2.3
4.8
1.2
2.7

Inflation (consumer price index)

25.8

21.4

13.6

24.7

15.4

11.4

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

11.8
4.6

10.4
5.9

4.2
2.3

3.4
2.1

1.1
1.3

-0.2
1.0

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

4.0
24.7
87.9
9.5

1.0
25.6
69.5
5.4

-1.7
20.0
87.2
3.5

-2.8
18.7
74.5
3.0

-2.4
17.5
69.2
2.9

-3.2
16.8
67.0
2.4

35.2
57.6
81.2

35.2
57.7
81.3

36.0
58.3
81.7

36.1
58.4
81.8

35.2
57.6
81.2

34.3
56.9
80.7

-1.9
12.6

-0.8
12.2

-0.4
12.0

-0.2
11.8

0.0
11.8

0.0
11.8

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-IDREA. Projection using neutral distribution (2018) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU.
b/ Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.

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BENINKey conditions andchallenges

Table 1

2023

Population, million

13.7

GDP, current US$ billion

19.6

GDP per capita, current US$

1429.4

International poverty rate ($2.15)

a

12.7
a

43.4

a

81.4

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

34.4

School enrollment, primary (% gross)

b

113.0

b

59.8

Total GHG emissions (mtCO2e)

26.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

The 2023 Niger border closure, policychanges in Nigeria and climate shocks
moderated growth to 5.8 percent. The international poverty measure fell to 11.7
percent. A revenue based fiscal consolidation decreased the fiscal deficit to 4.5 percent of GDP, although public debt increased slightly to 55 percent. Growth
will settle at 6 percent potential from2024, but risks are rising, including fromtransit trade and insecurity.

Despite achieving high GDP growth rates
averaging 4.8 percent over 2010-2019, preCOVID GDP per capita grew at a modest
rate of 1.8 percent. Although experiencing
a post-2020 growth recovery of 3.8 percent
over 2021-22, this delivered few private
wage jobs and limited poverty reduction.
Vulnerable employment (including contributing family workers and own-accountworkers) declined by only 0.3 ppt over
2010-2021, from 88.7 percent of total employment to 88.4 percent, in contrast to 8.1
ppt and 3.8 ppt for structural and aspirational peers. This vulnerability reflects the
structure of Benin’s economy, with a large
share of agriculture and prevalent informality. The closure of the Niger border following the July 2023 coup and the insecurity risks in the north of Benin disproportionately impacted poor and vulnerable households, slowing poverty reduction, and increasing fragility. Extreme climate events such as floods led to the declaration of a state of emergency in 32 municipalities, displacing 182,803 people andreversing poverty reduction.
The private sector is constrained by limited access to credit and lack of infrastructure, impeding productivity growthand job creation. Government action plans
have reduced the infrastructure gap,
though large investment projects andpressing expenditure needs combinedwith low tax revenue (10.5 percent of GDP

FIGURE 1 Benin / Key macroeconomic balances

Percent of GDP

in 2015-22) led to rising debt levels, from30.9 percent of GDP in 2015 to 54.2 percent
in 2022. Accordingly, boosting revenues iscritical to sustainably finance increasing
development needs. As fiscal space is limited, private sector mobilization is central
for infrastructure investment.

Recent developments
Growth slowed to 5.8 percent in 2023 (3.0
percent per capita terms), from 6.3 percent
in 2022, due to climate shocks undermining the agriculture sector (notably cotton),
and uncertainties in neighboring countries
disrupting transit trade. The service sector
was impacted by the Niger border closureand diminished demand from Nigeria. The
expansion of the Glo-Djigbé Industrial Zone
(GDIZ) and construction supported robust
growth of the secondary sector. Growth inagriculture combined with relatively low
inflation reduced the international poverty
rate ($2.15 a day, 2017 PPP) from 12.3 percent in 2022 to 11.7 percent in 2023.
Headline inflation doubled to 2.8 percent
in 2023 with the end of the gasoline subsidy in Nigeria, resulting in a 60 percent
increase in the price of smuggled gasoline, used by 80 percent of the population. To counter inflation across WAEMU countries, the Central Bank of West
African States (BCEAO) raised policy interest rates by a cumulative 150 basis
points since mid-2022 to 3.5 percent for
liquidity calls and 5.5 percent for the marginal lending facility. However, inflationin the region (3.7 percent in 2023) was

FIGURE 2 Benin / Actual and projected poverty rates andreal GDP per capita
Percent of GDP

60

0

50

-1

40

Poverty rate (%)
90

80000080700000

70

-3

60

-6

0

-7

50000040000040

30000030-51060000050-420900000-2

30

Real GDP per capita (constant LCU)

100

20

20000010

1000000

2018 2019 2020 2021 2022 2023e 2024f 2025f 2026f
Debt
Fiscal balance (rhs)
Current account balance (rhs)02011 2013 2015 2017 2019 2021 2023 2025

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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still above the 1-3 percent target range
and foreign exchange reserves have been
on a downward trend, estimated at 3.5
months of imports at end-2023, downfrom 4.3 months at end-2022.
The fiscal deficit declined to 4.5 percent of
GDP driven by a 0.6 ppt increase in tax
revenue and spending rationalization of
1.2 ppt of GDP. Despite the increase in the
public wage bill and security spending, thefiscal consolidation is on track with an increase in tax revenues and decline in capital expenditures. Although public debt
slightly increased to 55.0 percent of GDP(from 54.2 percent in 2022), the debt accumulation slowed down to 1.4 percent in
2023 in comparison to 9.6 percent in
2020-22. The current account deficit (CAD)
declined to 5.8 percent of GDP in 2023, driven by service exports (tourism), robust
export performance of industrial crops(cashew, soybeans, and palm oil), and reduced imports, offsetting a sharp decline
in cotton exports (62.8 percent of goods exports in 2021-22). The financing of the
CAD was supported by debt, and FDI inflow to the Special Economic Zone.

Outlook
Growth is projected to stabilize at 6.0
percent between 2024 and 2026 (average
3.2 percent per capita terms), driven by
investment and the GDIZ expansion. As
inflation is expected to moderate to an
average of 2 percent, consumption contributions to growth are set to increase.
Reforms to boost agriculture productivity
should increase output, while growth in
the secondary sector will be supported
by ongoing and new infrastructure investment under the PAG2 (Government
Action Program). The service sector
would benefit from the dynamism of
tourism, and the resumption of transit
trade with neighboring States. Poverty
rates are expected to trend downward,
with the headcount rate ($2.15 a day,2017 PPP) declining from 11.7 percent in
2023 to 10.0 percent by 2025, supported
by robust economic growth.
The BCEAO may need to continue tightening in 2024 to bring inflation under

TABLE 2 Benin / Macro poverty outlook indicators

control regionally and in the context ofrising uncertainties over the withdrawalof Niger, Mali, and Burkina Faso fromECOWAS and potential spillovers to
WAEMU. These uncertainties are likely toincrease investors’ risk perceptions leading to tighter financing conditions andputting additional strain on already low
foreign exchange reserves.
Through the 2023 Medium-term Revenue
Strategy, the government has committed
to mobilize additional revenue of 0.5 percent of GDP annually to support its fiscal
consolidation drive and reach the WAEMU
fiscal deficit target of 3 percent of GDP.
Lower debt accumulation will likely sustain public debt on a downward path toreach 52.1 percent by 2026. The CAD will
gradually decline to 4.8 percent by 2026,
due to higher exports from the GDIZ, financed by debt such as the US$ 750 million
Eurobond issued in 2024. Despite past resilience, downside risks remain. Headwinds may include prolonged transit tradedisruptions and climate-related shocks.
Worsening security risks are also a major
threat to development gains.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
7.2
4.8
8.5
17.8
12.6
16.8

2022
6.3
5.0
3.5
12.9
19.1
18.5

2023e
5.8
3.2
11.4
5.6
2.9
0.1

2024f
6.0
3.8
5.0
8.6
8.0
5.1

2025f
6.0
3.9
6.4
7.6
7.9
5.0

2026f
6.0
3.8
5.8
8.1
8.3
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.6
5.2
9.1
6.6

6.0
4.8
7.9
6.0

5.8
4.7
7.5
5.7

6.0
5.2
7.8
5.8

6.0
5.4
7.3
5.9

6.0
5.5
7.0
5.9

Inflation (consumer price index)

1.7

1.4

2.8

2.0

2.0

2.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-4.2
1.7

-6.2
1.9

-5.8
1.6

-5.4
1.6

-4.9
1.6

-4.8
1.7

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-5.7
14.1
50.3
-3.5

-5.5
14.3
54.2
-3.9

-4.5
14.9
55.0
-2.8

-3.8
15.2
54.1
-2.1

-3.0
15.7
52.9
-1.4

-3.0
16.0
52.1
-1.5

12.7
43.4
81.4

12.3
42.5
80.5

11.7
41.0
79.5

10.8
38.5
77.7

10.0
37.0
76.4

9.2
35.6
75.2

-0.4
30.6

0.2
29.7

-1.9
27.1

0.2
25.9

1.0
25.3

1.6
25.1

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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BOTSWANA

Key conditions andchallenges

Table 1

2023

Population, million

2.7

GDP, current US$ billion

22.1

GDP per capita, current US$

8249.6

International poverty rate ($2.15)

a

15.4
a

38.0

a

63.5

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

53.3

School enrollment, primary (% gross)

b

93.7

b

61.1

Total GHG emissions (mtCO2e)

53.3

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2017 PPPs.
b/ Most recent WDI value (2021).

In 2023, economic growth slowed to 3.3
percent, driven by reduced global demandfor diamonds. In FY24-26, economic activity is projected to stabilize at 3.5-4.0
percent, buoyed by an expansionary fiscal
policy and growth in the non-mining private sector. Diamond value chain risks
underscore the urgency of implementing
structural reforms to boost growth andjobs, including through human capitaldevelopment, enhancing market contestability, reducing regulatory andtrade barriers, allowing for reductionsin poverty and inequality.

Until the 2009 global financial crisis, abundant diamond resources, political stability,
effective institutions, and prudent macroeconomic policies delivered robust
growth. They allowed the government todeliver improved public services, including health, education, and infrastructure.
Social assistance programs also served toreduce extreme poverty.
Yet, since the early 2010s, structural constraints contributed to slowing down economic expansion as the economy remains
dominated by the diamond sector, which isincreasingly vulnerable to boom-and-bust
cycles on international markets. Poor learning outcomes, skills mismatches, and infrastructure deficiencies in transportation,communication, energy, and water services
have negatively impacted productivity andcompetitiveness. Regulatory barriers andred tape have increased the cost of doing
business, stifled entrepreneurship, and deterred investment. The large state presence,
especially state-owned enterprises, has
crowded out private investment.
The current growth model, based on low-labor-intensive sectors yields fewer jobs. The
unemployment rate remains high, at 25.9
percent in 2023Q3, mainly affecting theyouth. Poverty, projected at 14.3 percent in
2022 using the US$2.15 per day international
poverty line, remains high for Botswana’s
income level, while inequality (Gini index of53.3) is among the world’s highest.

Reforms to promote competition, reducethe costs of doing business, remove policy
barriers to trade and services, and promotetrade facilitation would strengthen economic diversification, boost growth andexports, and encourage job creation. Improving the effectiveness and efficiency of
public services, including public investment efficiency and strengthening education outcomes to meet the demand forskills in the private sector, could further
enhance growth. Incentivizing innovative
new businesses to emerge and grow, attracting Foreign Direct Investment, creating linkages with local firms, encouraging
market contestability would improve thebusiness environment.

Recent developments
Economic activity moderated to an estimated 3.3 percent in 2023 following the
5.8 percent rebound in the aftermath of
the COVID-19 pandemic spurred by the
decline in global demand for rough diamonds, falling prices, and intensifying
competition from synthetic diamonds.
Headline inflation declined in 2023, averaging 5.2 percent compared with 12.2
percent in 2022, supported by tight monetary policy conditions and a reduction
in fuel prices. In December 2023, the central bank cut the policy rate by 25 basis
points to 2.4 percent to address the persistent and sizable output gap.
The financial sector remains profitable andstable. However, the ongoing repatriationof pension fund assets poses liquidity risks

FIGURE 1 Botswana / Fiscal consolidation will rest on
spending cuts

FIGURE 2 Botswana / Actual and projected poverty rates
and real GDP per capita

Percent of GDP
45

Poverty rate (%)

Percent of GDP
2

40

Real GDP per capita (constant LCU)

70

90000
80000

0

60

-2

50

25

-4

40

50000

20

-6

30

40000

-8

20

-10

10

35
30

15

70000

0
2018

2020

Revenues and Grants

2022

2024

Expenditures

10000

0

-12
2016

30000
20000

10
5

60000

0
2009 2011 2013 2015 2017 2019 2021 2023 2025

2026
Balance

Sources: Statistics Botswana and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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in local financial markets due to limited investment opportunities.
After two years of a balanced budget, the fiscal balance deteriorated in 2023, despite
higher Southern African Customs Union(SACU) revenues. Higher recurrent spending alongside capital investments underscore the need for improved expenditure efficiency. Increased subsidies necessitate reevaluating their criteria, enhancing monitoring and evaluation, and exploring alternative policy instruments beyond price controls to improve spending quality. Implementation deficiencies constrain the expansionary fiscal stance and require lower
spending growth and a strong recovery inmineral revenues.
The current account turned into a surplus of
2.5 percent of GDP by 2023Q3 due to increased SACU receipts and mineral export
proceeds. Foreign exchange reserves increased, averaging US$4.7 billion in October
2023, equivalent to nine months of imports,
supported by increased SACU receipts andhigher capital inflows.
Amid high domestic prices and weak job
creation, poverty is estimated to have remained broadly unchanged.

Outlook
The economy is projected to expand by
3.5-4.0 percent annually over 2024-26 as
the global economy strengthens and demand for copper and diamonds increases. Projected investments in power generation from coal bed methane, batterygrade manganese, and solar photovoltaic
projects will support GDP growth.
An expansionary fiscal policy and accommodative monetary policy in 2024
are expected to support the economy
but effects of the first are mitigated byleakages owing to a high import content. The fiscal deficit is projected to deteriorate to 3.4 percent of GDP in FY24,
driven by large increases in capital andrecurrent spending and to steadily improve over the medium term, reaching a surplus by 2026. Projections hingeon SACU revenue trends and the government’s initiatives to boost domestic
revenue mobilization, which include theintroduction of electronic invoicing forvalue-added tax.

TABLE 2 Botswana / Macro poverty outlook indicators

Inflation is projected to remain within thecentral bank’s target range of 3-6 percent,in line with declining import prices of energy and food. The current account balance is projected to improve, driven by arecovery in global demand for diamonds.
The expansion of the private sector is expected to remain too subdued to increase
the demand for employment. Lower inflation is expected to support household
purchasing power. Still, limited job opportunities will constrain significant reductions in poverty and inequality,
which is projected to remain high, at 14
percent in 2024 based on the US$2.15 international poverty line.
Downside risks to the outlook include how
the G7’s decision regarding diamondtraceability may impact the diamond trade
and the local value chain; inward-looking
trade policies; delays in implementing theTransitional National Development Plan
and the severity of the ongoing drought,
which can impact output negatively andthe current account via higher imports, aswell as renew inflationary pressures andcreate fiscal pressures as the government
provides support to affected households.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
11.8
2.4
4.0
-0.3
31.7
2.3

2022
5.8
4.5
3.0
0.0
-5.6
-11.8

2023e
3.3
2.4
2.5
-0.7
4.6
-10.4

2024f
3.5
2.8
4.3
3.6
7.0
7.6

2025f
4.3
2.8
-0.3
3.3
9.9
5.4

2026f
4.0
2.2
-0.9
1.8
10.2
5.2

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

11.9
-1.0
19.3
8.1

5.8
2.4
7.6
4.8

3.3
2.6
4.0
2.9

3.5
2.0
4.4
3.0

4.3
2.4
4.6
4.2

4.0
2.2
4.7
3.6

Inflation (consumer price index)

6.7

12.2

5.2

4.9

4.7

4.5

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-0.5
0.6

2.9
0.2

2.0
0.7

1.1
0.7

1.3
0.6

1.5
0.6

0.0
31.9
22.4
0.5

0.0
28.5
20.6
0.6

-2.4
30.0
22.0
-1.6

-3.4
31.7
25.0
-2.5

-1.6
29.2
22.5
-1.0

1.2
28.8
20.1
1.8

14.8
37.5
62.6

14.3
37.0
61.8

14.2
36.8
61.6

14.0
36.6
61.2

13.7
36.4
60.8

13.4
36.1
60.3

0.8
11.3

-0.7
11.3

-0.4
11.1

1.2
16.3

1.5
18.0

1.5
19.6

Fiscal balance (% of GDP)
Revenues (% of GDP)ab

Debt (% of GDP)a
Primary balance (% of GDP)c,dInternational poverty rate ($2.15 in 2017 PPP)c,dLower middle-income poverty rate ($3.65 in 2017 PPP)c,dUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Fiscal balances are reported in fiscal years (April 1st -March 31st).
b/ Refers to Public and Publicly Guaranteed debt.
c/ Calculations based on 2009-CWIS and 2015-BMTHS. Actual data: 2015. Nowcast: 2016-2023. Forecasts are from 2024 to 2026.
d/ Projection for $2.15 poverty uses annualized elasticity (2009-2015) with pass-through = 0.87 based on GDP per capita in constant LCU. Higher poverty lines use regionalelasticity.

MPO

7

Apr 24BURKINA FASO
Table 1

2023

Population, million

23.3

GDP, current US$ billion

22.9

GDP per capita, current US$

984.0

International poverty rate ($2.15)

a

25.3
a

60.7

a

88.1

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

37.4

School enrollment, primary (% gross)

b

82.4

b

59.3

Total GHG emissions (mtCO2e)67.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

GDP growth is estimated at 3.2 percent(0.5 percent per capita) in 2023, supported by services, while mining washampered by insecurity. Average inflation subsided to 0.7 percent, facilitatinga small decrease in the extreme poverty
rate to 25.9 percent. The growth outlook is expected to remain constrainedby insecurity and subject to downside
risks, including political instability, increasing financing costs, impacts of theannounced ECOWAS withdrawal, andclimate-related shocks.

Key conditions andchallenges
Insecurity and political instability remain
the most critical growth constraints. The
two coups in 2022 triggered a sharp reduction in external development financing
while negatively affecting private investment. Insecurity has disrupted industrial
mining (gold), which accounted for 77 percent of exports, 16 percent of GDP, and 22
percent of government revenues in 2023.
Displacement of local populations weakens
agricultural output, which employs over 90
percent of the poor and is already highly vulnerable to climate shocks, aggravating foodinsecurity. In 2023 there has been a doublingof recorded security-related deaths to 8,494.
In September 2023, Burkina Faso, Mali, andNiger formed the “Alliance of Sahel States”(AES) – a security and military pact with political and economic aims. On January 28,
2024, in a joint communiqué, the three countries announced their ‘immediate’ withdrawal from ECOWAS. According to the revised ECOWAS Treaty, a notification periodof one year is required to leave ECOWAS.
These developments have increased political and policy uncertainty, including thetimetable for elections in Burkina Faso.

Recent developments
In 2023, the economy is estimated tohave grown by 3.2 percent (0.6 percent

per capita), up from 1.8 percent in 2022.
The services sector, accounting for 48 percent of GDP, remained the main growth
driver, fueled by an expansion of the public sector. Agricultural sector growth washindered by security challenges, which restricted access to rural areas. Secondary
sector growth was kept positive only by
manufacturing and construction, whilegold production dropped further due toinsecurity despite high international gold
prices. On the demand side, private consumption was the main growth driver, bolstered by low inflation. In contrast, investment is expected to stagnate given highpublic investment in 2022 and uncertainties in the mining sector. Favorable termsof trade with an increase in gold prices
coupled with a decrease in energy prices
helped narrow the current account deficit
to 4.9 percent of GDP in 2023.
After surging to a record high of 14.1 percent
in 2022, inflation fell to 0.7 percent in 2023
with declines in local product prices, particularly for cereals, flour, and fresh vegetables. As a result, the extreme poverty rate,
which was rising through 2022, has decreased by 0.6 percentage points to 25.9 percent in 2023. However, the humanitarian situation remains very critical, with around 2
million internally displaced persons, andan estimated 2.3 million facing severe foodinsecurity as of December 2023.
To counter inflation across WAEMU countries, the Central Bank of West African
States (BCEAO) raised policy interest
rates by a cumulative 150 basis points
since mid-2022 to 3.5 percent for liquidity
calls and 5.5 percent for the marginal
lending facility. However, inflation in the

FIGURE 1 Burkina Faso / Real GDP growth and contributions
to real GDP growth

FIGURE 2 Burkina Faso / Actual and projected poverty
rates and real GDP per capita

Percent, percentage points
15

Poverty rate (%)

10
5
0
-5
-10
2021
2022
Gov. cons.
Private cons.
GDP

2023
2024
Exports
Imports

2025
2026
GFCF
Statistical disc.

500000904500008040000070

35000060

30000050

25000040

2000003015000020

100000

10

50000

0

0
2009 2011 2013 2015 2017 2019 2021 2023 2025

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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Real GDP per capita (constant LCU)

100

8

Apr 24

region (3.7 percent in 2023) was still
above the 1-3 percent target range andforeign exchange reserves have been on a
downward trend, estimated at 3.5 monthsof imports at end-2023, down from
4.3 months at end-2022.
The country started fiscal consolidationin 2023 with the deficit falling to 6.4
percent of GDP – 1.2 percent lower
than 2022 (excluding a one-time inclusion of all accumulated securitized debt
in 2022). The consolidation was expenditure-driven, through a scaling back of
capital investment and subsidies (helped
by lower international oil prices), while
military and humanitarian spending remained high. As bilateral donor grants
declined, efforts were made to sustain
domestic revenue mobilization. With astill elevated fiscal deficit, public debt
is estimated to have crossed the 60
percent of GDP mark in 2023. The
share of expensive regional financing
is increasing; in February 2024, Burkina Faso’s average yields on the regional bond market were 8 percent
for 6-month T-bills and 9.6 percent for

3-year T-bonds. The risk of external
debt distress remains moderate.

Outlook
The outlook hinges on the security situation. If the situation does not deteriorate
further, growth could slowly pick up andaverage 4 percent (1.5 percent per capita)
over 2024-26, driven by recovering mining
and agricultural production and service
sector growth. This includes the expected
impacts of an orderly ECOWAS withdrawal: lower trade with non-WAEMU ECOWAS states, higher investors’ risk premia,
and increased regional financing costs.
If the government continues its fiscal consolidation path, the fiscal deficit is expected to gradually decline towards the WAEMU ceiling of 3 percent of GDP. Public
debt as a share of GDP is forecast to riseat least until 2025, driven by high interest
rates on domestic debt.
Poverty is expected to remain relatively
unchanged over the medium term. While

TABLE 2 Burkina Faso / Macro poverty outlook indicators

inflation has come down dramatically andis expected to remain below 3 percent overthe medium term, accelerating poverty reductions will require higher growth per
capita, particularly in agriculture, which
employs 71 percent of the poor.
The outlook remains subject to significant
downside risks, including a deteriorationin the security situation, political instability, climatic shocks, terms of trade shocks,
and the withdrawal from ECOWAS. An
unnegotiated ECOWAS withdrawal with
disruptions to transport, transit, and freemovement of goods, services, capital, andlabor could exacerbate negative impacts
due to spillovers onto WAEMU trade. The
BCEAO may need to continue monetary
tightening in 2024 to bring inflation undercontrol and in the context of increased
risks from the withdrawal of Niger, Mali,
and Burkina Faso from ECOWAS. A further increase in the cost of financing on theregional market for Burkina Faso could require further cuts in public expenditure,and especially investment, at the sametime as defense and security expenditures
pressures mount.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.9
3.4
6.6
34.8
6.5
15.5

2022
1.8
4.3
5.2
6.4
-2.8
8.2

2023e
3.2
3.1
4.5
0.7
-2.1
-1.9

2024f
3.7
3.4
5.4
4.0
3.0
3.8

2025f
3.8
3.5
3.9
4.4
3.1
3.2

2026f
4.2
3.6
3.8
5.4
3.4
3.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.9
-4.1
11.0
10.3

1.8
5.7
-8.2
6.0

3.2
2.3
0.3
5.2

3.7
4.5
2.8
3.7

3.8
4.3
3.4
3.8

4.2
4.3
3.9
4.3

Inflation (consumer price index)

3.9

14.1

0.7

2.8

2.5

2.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

0.4
0.5

-6.2
0.3

-4.9
0.3

-4.2
0.4

-4.1
0.5

-3.7
0.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-7.5
20.2
55.4
-6.0

-10.6
21.6
58.1
-8.5

-6.4
21.3
61.4
-4.3

-5.6
21.3
63.3
-3.0

-4.7
21.2
65.4
-1.9

-4.4
21.2
63.2
-1.5

25.3
60.7
88.1

26.5
62.4
88.7

25.9
61.4
88.3

25.4
61.1
88.1

25.0
60.5
87.8

24.4
59.7
87.3

6.0
11.1

4.6
11.4

5.0
11.8

5.1
12.3

5.1
12.7

4.8
13.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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Apr 24

BURUNDI

Key conditions andchallenges

Table 1

2023

Population, million

13.2

GDP, current US$ billion

3.5

GDP per capita, current US$

267.3

International poverty rate ($2.15)

a

62.1

Lower middle-income poverty rate ($3.65)
Gini index

a

a

86.2
37.5

School enrollment, primary (% gross)

b

103.9

b

61.7

Total GHG emissions (mtCO2e)9.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2020), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

In 2023, economic growth rebounded to
2.7 percent from 1.8 percent in 2022,
spurred by robust agricultural production. However, inflation spiked, thenmoderated late in the year. Poverty ratewould remain stable in 2024, due to the
combination of insufficient growth, projected to improve to 3.8 percent, andrapid population expansion. Risks include regional turmoil, closure of the
Burundi-Rwanda border, delayed exchange rate unification, and limited
external financing.

Burundi’s economic landscape is marred bya fragility trap, with entrenched poverty.
Political instability, weak institutions, rapid
population increase, and environmental
degradation are persistent vulnerabilities.
Economic challenges include low productivity, high dependence on foreign aid, inadequate infrastructure, and limited diversification. Agriculture contributes 40 percent to
GDP and engages over 90 percent of theworkforce. Industrialization is minimal,and exports are confined largely to coffee
and tea. Despite possessing significant reserves of minerals critical for the energy
transition, the mining sector is stunted, stifled by uncompetitive business environment, thus making an insignificant contribution of less than 1 percent to GDP. The export-to-import coverage hovers between
15-20 percent, signaling structural external
imbalances. Environmental issues, including land degradation and deforestation,
threaten to keep agricultural production
low. High population growth strains resources and infrastructure, exacerbating
conflicts amongst local communities while
impeding sustainable development.
Since the 2015 political crisis, macroeconomic imbalances have persisted, ranging
from high fiscal and current accountdeficits, and inflated currency value to limited external financing and fiscal dominance of monetary policy, compounded bysoaring public debt and scant investment

in infrastructure and human capital. The
provision of basic public services needs tokeep pace with rapid population growth.
Secondary school enrollment is a mere 48
percent, and 30 percent of adolescent girls
are not in school. Chronic malnutrition is
widespread, with stunting affecting 55.8
percent of children under five, a figure
likely to have worsened by recent foodinflation. As of 2023, poverty afflicts 62
percent of the population (at US$ 2.15
per capita/day in 2017PPP).
Continued re-engagement with the international community and the government’s commitment to reforms, throughthe completion of the exchange rate unification reforms, modernization of themonetary policy framework, fiscal consolidation, governance reforms, andgrowth-enabling
structuralreforms,would help change the country’s growthtrajectory while boosting social spending
and productive investments.

Recent developments
Economic growth picked up in 2023
against a backdrop of high inflation andwidening fiscal and current accountdeficits. Growth accelerated to 2.7 percent, up from 1.8 percent in 2022, buoyedby favorable rains and robust public investment. Industry and services felt thepinch of high inflation, fuel shortages,
and flaring premium on the forex parallelmarket. On the demand side, growth wasunderpinned by government and private
sector spending.

FIGURE 1 Burundi / Fiscal and current account deficit

FIGURE 2 Burundi / Actual and projected poverty rates andreal private consumption per capita

Percent of GDP
18

Poverty rate (%)

16

90

14

80

12

70

14500060

140000Real private consumption per capita (constant LCU)

100

10

155000150000

50

8
6

40

13500030

130000

4

20

2

10

1250000012000020132017 2018 2019 2020 2021 2022 2023 2024 2025 2026

2015

2017

2019

International poverty rate

Fiscal deficit

Current account deficit

Real priv. cons. pc

Sources: Official statistics and World Bank staff estimation.

Source: World Bank. Notes: see Table 2.

MPO

10

Apr 24

2021

2023

2025

Lower middle-income pov. rate

Aided by expenditure cutbacks, the fiscal
deficit fell to 7.7 percent of GDP, downfrom 10.7 percent the previous year. The
deficit was predominantly financed
through domestic shorter-maturity higherinterest loans from banks and Central
Bank advances, reflecting a reliance on domestic debt instruments. Subsequently,
public debt climbed to 72.4 percent of GDP
from 68.4 percent in 2022. The current account deficit (CAD) remained high at 13.9
percent of GDP in 2023, pressured by soaring oil prices and sluggish exports amid
delayed mining contract negotiations. Remittances fell, reducing net current transfers, but capital account balances benefited
from increased project grants. Trade credits are the mainstay of financing the current account deficit.
By December 2023, Burundi’s international reserves could cover just 0.8 monthsof imports, a significant drop from 1.8
months the previous year. The foreignexchange market saw a parallel premiumsoaring to 75.0 percent in March 2023,
up from 62.0 percent a year prior. Inflation peaked to an average of 27.1 percent
in 2023 due to escalating food and fuel costs—but softened in the final quarteras food prices declined. Inflation’s bite is
sharpest for the poor, who allocate morebudget to food. This trend may swellpoverty rates in the short term and erode
human capital long-term, as families cut
meals, liquidate assets, or resort to childlabor. International poverty rate ($2.15 in2017 PPP) is estimated to remain elevated at 62 percent in 2023.

Outlook
Growth is forecasted to rise to 3.8 percent
in 2024, and to accelerate to 4.6 percent on
average in 2025-26, supported by robust
agricultural season, mining upticks, andgovernment spending. Favorable rainfall
will sustain agricultural growth, while services and industry should rebound due toeased forex restrictions and increased
power generation. High private consumption and public investment will likely continue, spurred by economic recovery.
The fiscal deficit is expected to narrow to
4.7 percent of GDP in 2024 and 3.2 percent by 2026, underpinned by the digitization of tax administration and a recalibration of non-essential spending, supported by the IMF ECF program. Public debt is projected to recede by 6 percentage points from its 2022 level, settling at 58.8 percent of GDP in 2026. The
CAD will remain high over 2024–2025

TABLE 2 Burundi / Macro poverty outlook indicators

before easing to 12.9 percent of GDP in
2026, due to mining exports resumption
and positive impacts of foreign exchange
reforms. Burundi’s growth path is notmatching high demographic growth, andpopulation is set to double by 2050,
further exacerbating existing pressureson limited land resources and services.
Against the current trajectory, poverty is
projected to remain unchanged at 61.9
percent in 2024. Substantial structuralreforms are essential to expand the private nonfarm sector, boost agricultural output, and secure a well-educated,
healthy population.
A favorable review of IMF’s program
along with reducing the misalignment
between the official and parallel exchange
rates could improve external accounts,
with structural reforms likely enhancing
exports, foreign investment, and revenues. Conversely, agricultural setbacks
from adverse weather and a protracted
closure of the border with Rwanda could
cloud growth prospects. Failure to consolidate fiscal accounts or boost revenue
collection could heighten fiscal risks andexternal vulnerabilities. A disruption to
the IMF program might reduce accessto crucially needed concessional financing and aid, and spur a further deterioration of external accounts.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.1
3.0
2.9
3.9
3.4
3.2

2022
1.8
2.4
5.9
4.0
5.8
7.0

2023e
2.7
2.7
5.4
8.1
7.8
7.0

2024f
3.8
3.0
5.1
10.5
13.8
7.1

2025f
4.4
3.2
5.2
12.3
14.2
7.3

2026f
4.8
3.4
5.0
13.2
15.2
7.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.1
3.4
3.0
2.9

1.8
-0.8
3.2
3.1

2.7
2.8
2.7
2.6

3.8
3.8
3.8
3.8

4.3
4.0
4.9
4.3

4.8
4.2
5.3
4.9

Inflation (consumer price index)

8.3

18.8

27.1

22.8

20.4

16.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-11.9
0.3

-15.9
0.3

-13.9
0.0

-15.3
-0.1

-15.2
-0.1

-12.9
-0.1

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.6
23.8
66.6
-1.6

-10.7
22.8
68.4
-8.2

-7.7
22.3
72.4
-4.8

-4.7
23.0
69.9
-2.1

-4.2
23.4
64.8
-1.4

-3.4
23.6
58.8
-1.0

61.9
86.1

62.1
86.2

62.0
86.2

61.9
86.1

61.7
85.9

61.4
85.7

3.9
8.7

4.0
8.6

3.9
8.6

3.9
8.7

3.7
8.9

3.7
9.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2020-EICVMB. Actual data: 2020. Nowcast: 2021-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2020) with pass-through = 0.87 (Med (0.87)) based on private consumption per capita in constant LCU.

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11

Apr 24

CABO VERDE
Table 1

Key conditions andchallenges
2023

Population, million

0.5GDP, current US$ billion

2.5

GDP per capita, current US$

4968.9International poverty rate ($2.15)

a

4.6
a

19.3

a

50.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

42.4

School enrollment, primary (% gross)

b

97.0

b

74.1

Total GHG emissions (mtCO2e)0.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2017 PPPs.
b/ WDI for School enrollment (2019); Life expectancy(2021).

Growth is expected to have slowed to
4.8 percent in 2023 despite exports,
mainly tourism, returning to pre-pandemic levels. Inflation stood at 3.7 percent, aided by declining fuel and foodprices. Growth-friendly fiscal consolidation should allow stable growth of 4.7
percent over the medium term, though theoutlook remains subject to downside risks
from commodity price spikes, weaker external demand, limited progress on key
SOE reforms, and climate shocks.

Cabo Verde is a small, and vibrant island
nation with an open economy. Its economic growth has been driven by tourism, remittances, and foreign direct investment enabled by structural reforms and social andpolitical stability. The development model
has shown signs of fatigue since the 2008
global financial crisis: growth fell from a robust average 7.5 percent in the 2000s to 2.8
percent in the last decade (excluding 2020)
and is highly volatile. The impact of the pandemic accentuated debt risks and underscored key vulnerabilities, including thedominance of the tourism sector, absence ofbuffers to shocks, and poor performing
State-Owned Enterprises (SOE).
Achieving higher and sustained growth requires reforms to reduce the economy’s vulnerabilities to external economic and climate-related shocks; increase private sector
productivity to benefit from the thriving
tourism sector; and reduce internal transport costs and market fragmentation. A
gradual transition to blue (ocean related)and green (environment related) activities
are policy priorities for the medium term.

Recent developments
Economic growth is estimated to haveslowed to 4.8 percent in 2023 (4.2 percent inper capita terms), reflecting the stabilizationof service exports after the post-covid
tourism rebound. On the supply side, accommodation, transport, and commercedrove growth, while on the demand side,
growth was led by exports and private
consumption. Growth was accompanied
by a 0.9 percentage points reduction inpoverty (using the US$3.65 per person
and per-day-2017 PPP).
Headline inflation decelerated to 3.7 percent (y/y) in 2023 from the high of 7.9 percent in 2022, driven by the easing of international food prices and falling oil prices.
Food inflation, which represents 25 percent of the CPI basket, slowed to 8.9 percent while energy inflation decreased by
3.2 percent on average. Core inflation
reached an annual average of 2.3 percent.
Poverty ($3.65 per day PPP 2017) is expected to reach 15.1 percent in 2023, downfrom 16.0 percent in 2022, but above its
2019 pre-pandemic level of 14.1 percent.
Economic growth was fundamental forpoverty reduction in 2023, coupled witha decrease in inflation compared to 2022.
Growth of the services sector led to creation of new jobs, especially in tourism,
but the household real income benefits
were dampened by inflation pressures,
especially in food items.
Increased revenues and under executionof the capital budget narrowed the fiscal
deficit to 0.5 percent of GDP in 2023 from
4.3 percent in 2022. Revenue increased byabout 20 percent over the same period driven by corporate income tax and VAT collection, as well as revenues linked to the
airport private concession. Total expenditure increased by 2.6 percent. Public debt
declined from 127.1 percent in 2022 to

FIGURE 1 Cabo Verde / Real GDP growth and inflation

FIGURE 2 Cabo Verde / Actual and projected poverty rates
and real GDP per capita

Percentage
40

Poverty rate (%)

Percentage
40

30

30

20

20

10

60

50000040000040

0-1060000050

100Real GDP per capita (constant LCU)

70

300000

-20

-10

30

-30

-20

20

-40
2019Q1 2019Q4 2020Q3 2021Q2 2022Q1 2022Q4 2023Q3

-30

10

200000100000

0Real GDP growth (lhs)
Food and beverages inflation (rhs)Headline inflation (rhs)
Energy inflation (rhs)02007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Source: Government of Cabo Verde.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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115.3 percent in 2023, driven by GDP
growth. External debt is mainly concessional, at 105 percent of GDP, while domestic debt has surged to over 30 of GDP
post-COVID-19, driving the high risk ofoverall debt distress.
The current account deficit (CAD)widened from 3.4 percent of GDP in 2022
to 5.3 percent in 2023, due to the slowdown
in exports of goods and services, mainly
tourism, and remittances compared to2022. The CAD was financed primarily by
FDI and concessional loans, while international reserves remained at a comfortable
5.8 months of import coverage.

OutlookReal GDP growth is projected to remain
relatively stable in 2024, at 4.7 percent (4.2
percent in per capita terms). Over the
medium term, growth will be supportedby the implementation of structural reforms aimed at improving public sector
efficiency and the business environment.

Inflation is expected to decline further to
2.7 percent in 2024, as global inflation
the international price shock continues tosubside, and converge to around 2 percent over the medium term, supported by
the strong nominal anchor provided by
the peg to the Euro.
Poverty (using US$3.65 per day-2017
PPP) is projected to decline to 14.9 percent in 2024 driven by the services andindustry sectors, and a moderation of inflation. Projections for 2025 suggest a further decline in poverty to 14.2 percent,aligning with the pre-pandemic level,with this downward trend continuing into
2026 to reach 13.4 percent.
Overall fiscal balance is projected to widen
to -3.0 percent of GDP in 2024, reflecting
the increase in total expenditure with staff
salary updates, increases in social benefits
and acquisition of goods and services, andsound execution of public investments.
Tax revenue collection will remain strong,with a review of tax benefits and the continued implementation of measures to improve tax administration efficiency andbroaden the tax base. Continued efforts to

TABLE 2 Cabo Verde / Macro poverty outlook indicators

mobilize domestic revenue and containcurrent expenditure will reduce the fiscal
deficit to just above 1 percent of GDP
by 2026. The public debt-to-GDP ratio is
expected to improve to 102.1 percent by
2026 but continued management of fiscal risks related to SOE arising from loan
guarantees remains critical.
Stronger import growth vis-à-vis exports,
with the continued dynamism of economic
activity, will increase the CAD to 6.2 percent of GDP in 2024. CAD is projected to
decline to 5.7 percent of GDP in 2026 supported by stronger growth in tourism andremittances, which, together with higher
FDI inflows, will help maintain international reserves at about 6 months ofprospective imports.
The outlook is subject to substantial downside risks stemming from new commodity
price spikes due to geopolitical shocks,
weaker external demand in tourism markets, and limited progress with the SOE reform agenda, which could undermine thefiscal consolidation and weaken growth.
Climate-related shocks will remain a concern, given the country's high vulnerability.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.6
1.4
5.3
23.4
2.1
7.7

2022
17.1
25.9
-4.6
-54.2
97.5
12.7

2023e
4.8
6.5
0.5
-2.4
4.4
3.4

2024f
4.7
8.8
20.4
-19.1
8.6
12.5

2025f
4.7
8.6
0.9
-6.5
9.2
9.5

2026f
4.6
8.1
2.7
1.8
9.5
11.4

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.6
3.1
13.2
4.4

17.1
-14.3
7.5
21.9

4.8
-2.0
7.7
4.7

4.7
-2.3
5.2
5.1

4.7
2.6
5.5
4.7

4.6
2.7
5.4
4.6

Inflation (consumer price index)

1.9

7.9

3.7

2.7

2.1

1.9

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-12.2
4.6

-3.4
4.7

-5.3
4.0

-6.2
3.9

-6.5
3.7

-5.7
3.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-7.7
23.9
152.0
-5.5

-4.3
22.4
127.1
-2.0

-0.5
24.6
115.3
1.8

-3.0
28.3
112.0
-0.7

-2.2
27.4
107.7
0.0

-1.1
26.3
102.1
1.1

4.7
19.7
51.8

3.7
16.0
45.7

3.5
15.1
42.4

3.5
14.9
41.9

3.5
14.2
40.1

3.1
13.4
38.5

-3.5
84.5

-1.2
85.0

5.3
85.2

6.4
85.6

6.7
86.0

6.6
86.5

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2015-IDRF. Actual data: 2015. Nowcast: 2016-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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CAMEROON

Key conditions andchallenges

Table 1

2023

Population, million

28.8

GDP, current US$ billion

47.4

GDP per capita, current US$

1646.1

International poverty rate ($2.15)

a

23.0
a

46.7

a

76.0

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

42.2

School enrollment, primary (% gross)

b

110.7

b

60.3

Total GHG emissions (mtCO2e)134.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Cameroon's economy grew by 4.0 percent
in 2023, up from 3.6 percent in 2022.
However, poverty reduction remains
slow, with 23.0 percent living below theinternational poverty line of $2.15 PPP
per person per day. Sustained fiscal consolidation kept the deficit at 0.8 percent of
GDP in 2023. Looking ahead, while themedium-term outlook is favorable, risks
include commodity price volatility andpersistent security crisis in certain regions. Low per capita growth coupledwith high food and energy prices may
worsen poverty.

Cameroon is the largest economy in the
CEMAC region, accounting for 45 percent of the region's GDP and 63 percent
of regional foreign exchange reserves in
2023. It is also the region’s most diversified economy. However, the oil sector still accounts for 2.2 percent of GDP
and 18.4 percent of fiscal revenues, keeping the country vulnerable to oil priceshocks. Cameroon’s debt pressures haveintensified, calling for cautious fiscal policies and improved debt management.
The current development model appears
incapable of delivering Cameroon’s ambition of becoming an upper middle-income
country by 2035, as institutions of governance have deteriorated, human capital remains weak, the business environment isunfavorable, and climate change represents a growing threat. The employment
landscape reflects concerning trends, particularly for the youth, with half of theworking-age population either unemployed or otherwise disengaged from theworkforce. The informal sector, constituting over 85 percent of total employment,
is experiencing a shift from agriculture tourban informal activities, calling for urban
development. Productivity, notably inagriculture, lags similar countries due tohigh input costs, limited financing, and underutilization of innovative technologies.
Cameroon has failed to reduce extreme
poverty over the past two decades.

FIGURE 1 Cameroon / Real GDP growth and contributions
to real GDP growthHousehold survey data collected in 2021/
22 suggest 23.0 percent of the population
lives below the extreme international
poverty line of $2.15 PPP per person perday. The extreme poverty rate has remained unchanged since 2001, decreasing
by only 0.9 percentage points between
2014 and 2021. The population living in extreme poverty has swelled by over 2 million since 2001 and now exceeds 6 million.
Inequality remains high, with a consumption Gini coefficient of 42.2, indicatinglarge disparities in living standards between regions and urban and rural areas.
Furthermore, fragility is proliferating, withsix out of Cameroon’s ten regions now affected by conflict, including spillovers fromconflicts in neighboring countries. Climatechange also threatens Cameroon’s povertyreduction prospects given its reliance onnatural resources, with around 4 in 10 workers being primarily engaged in agriculture.

Recent developments
Cameroon’s economic recovery continued
in 2023, with real GDP growing by 4.0 percent, up from 3.6 percent in 2022 driven by
improvements across various sectors. Services and manufacturing sectors expanded
respectively by 4.5 percent and 5.5 percent,thanks to better energy supply and market
conditions. Private investments supported
the construction sector’s growth despite
lower public spending. Agriculture sector
grew by 3.5 percent, driven by high cocoa
and cotton prices and the recovery of the
Cameroon Development Corporation.

FIGURE 2 Cameroon / Actual and projected poverty rates
and real GDP per capita
Poverty rate (%)

Real GDP per capita (constant LCU)

90

8000008070000070

60000060

5000005040000040

30000030
2020000010

100000002007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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Inflation increased to 7.4 percent as of theend 2023 from 6.3 percent in 2022 mainly
due to higher domestic fuel prices, despite
the tight monetary policies and global inflation easing. Despite service and income
balance improvements, the current account balance deteriorated slightly, reaching 3.6 percent of GDP from 3.5 percent
due to a widened trade deficit caused bydeclining oil and gas exports.
Fiscal consolidation efforts in 2023 resulted in a reduced fiscal deficit of 0.8 percent of GDP, down from 1.1 percent in
2022, supported by lower fuel subsidies,
reduced capital spending, and improved
tax collection. Public debt decreased to41.9 percent of GDP in 2023 from 45.3
percent in 2022. Nonetheless, Cameroon
remained at a high risk of debt distress,
despite sustainable debt levels.
The regional central bank (BEAC) maintained in 2023 a tight monetary policy tocontain inflation and support the exchange
rate. While Cameroon's banking system remained strong, vulnerabilities remained,with the non-performing loan ratio reaching 15.3 percent in 2023 and a significant
exposure to sovereign bonds.
The gradual reduction in fuel subsidies will
provide additional fiscal space for pro-poor
spending but may lead to short-term inflationary pressures. Tax incentives for agriculture and minimum wage increases will

mitigate impacts, though the latter’s effecton poverty reduction may be limited dueto the prevalence of informal employment.

OutlookThe medium-term economic outlook for
Cameroon is positive on balance but subject to downside risks. Real GDP growth isprojected at 4.3 percent in 2024 and 4.5 percent in 2025 and 2026, driven by dynamism
in agro-industry, forestry, and services.
The anticipated LNG production boom is
expected to offset declining oil field production in 2025. Improved energy supply
from projects like the Nachtigal hydroelectric dam and Memve’ele power planttransmission lines will benefit manufacturing and construction, backed by robust
public investment.
The current account deficit is expected togradually narrow over the medium term,
benefiting from sustained high commodity
prices, the LNG boom in 2025, and government export efforts. Over the medium
term, inflation is expected to drop from 7.0
percent in 2024 to 4.9 percent by 2026, supported by moderating import price inflation, improved industrial production frombetter energy supply, and the BEAC's tightmonetary policy.

TABLE 2 Cameroon / Macro poverty outlook indicators

The fiscal deficit is projected to remain below 1 percent of GDP, supported by measures aimed at enhancing revenue andgradually reducing current expenditures,
particularly fuel subsidies. These actions
are expected to counterbalance the anticipated rise in capital expenditure necessary
for accelerating investment projects. Public
debt is projected to decline, reaching 35.5
percent of GDP by 2026, driven by improved debt management.
However, low per capita growth may exacerbate poverty, with the poverty rate at
the international poverty line of $2.15 PPP
per person per day projected to reach 25.0
percent by 2026, leaving around 8 million
Cameroonians in poverty. Moreover, foodprices are projected to rise faster relative
to other goods. Redirecting budgetary savings from fuel subsidy reductions into productive spending, including investments
in social programs and human capital,
could support the poor and vulnerable inthe short run, but sustained poverty reduction will require accelerating economic
growth that creates more jobs.
The outlook is subject to risks such ascommodity price volatility, ongoing security crises in certain regions, uncertain
budget support from external donors,
exchange rate fluctuations impacting
debt and fuel subsidies, and increased
climate-related disasters.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.3
3.5
3.4
7.9
3.2
9.0

2022
3.6
3.6
5.1
3.2
10.1
7.3

2023e
4.0
3.7
3.1
5.1
10.1
7.8

2024f
4.3
3.7
2.4
8.4
10.0
9.7

2025f
4.5
3.8
2.2
9.0
9.9
9.9

2026f
4.6
4.0
1.7
9.1
9.9
10.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.3
4.1
4.1
2.7

3.6
4.3
4.2
3.1

4.0
4.7
4.5
3.5

4.3
5.0
4.8
3.9

4.5
5.6
5.4
3.8

4.6
5.6
5.4
3.9

Inflation (consumer price index)
Current account balance (% of GDP)

2.5
-3.8

6.3
-3.5

7.4
-3.6

7.0
-3.3

5.7
-3.4

4.9
-3.0

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.9
14.2
47.3
-1.9

-1.1
15.9
45.3
-0.3

-0.8
16.0
41.9
0.2

-0.7
16.1
40.1
0.2

-0.8
16.1
38.8
0.0

-0.7
16.3
35.5
0.0

23.0
46.7
76.0

22.9
46.3
75.6

23.9
47.7
76.5

24.8
48.3
77.0

25.2
48.4
77.0

25.0
48.4
76.7

1.8
7.3

1.4
7.4

1.5
7.6

1.5
7.8

1.8
8.1

1.7
8.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-ECAM-V. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.
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CENTRALAFRICAN REP.
Table 1

2023

Population, million

5.7

GDP, current US$ billion

2.6

GDP per capita, current US$

460.3

International poverty rate ($2.15)

a

65.7
a

85.8

a

96.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

Key conditions andchallenges

a

43.0

School enrollment, primary (% gross)

b

110.7

b

53.9

Total GHG emissions (mtCO2e)55.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2021).

Economic growth is estimated to havereached 0.9 percent in 2023, compared to
0.5 percent in 2022. CAR's structural vulnerabilities, compounded by external
shocks, continue to strain public finances
and adversely affect growth, food security,and poverty reduction efforts, necessitatingbold macro-fiscal reforms. As of 2023, twothirds of the population lived in extreme
poverty, with projections suggesting a one
percentage point increase in the next two
years due to negative per capita growth.

Since 2020, CAR’s macro-fiscal vulnerabilities have been exacerbated by a series of exogenous shocks (renewed insecurity and violence, COVID-19 pandemic and Russian invasion of Ukraine).
These shocks have strained public finances, added inflationary pressures,
jeopardized food security, and slowed
poverty reduction efforts. Also, climate
shocks, including drought and floods,
continue to pose threats to an alreadyalarming humanitarian situation, particularly in remote areas. As of December
31, 2023, the total number of internallydisplaced persons (IDPs) was estimatedat 511,803 individuals, while approximately 754,421 people were registered as
refugees in neighboring countries.
The private sector continues to behampered by unattractive businessconditions and high borrowing costs.
Employment opportunities remain extremely limited while the workforce is
growing. Continued efforts by country
authorities to promote more inclusive
and resilient growth will be critical.
This includes improving the businessenvironment and state-owned enterprise (SOE) governance to attract private investment, improving revenue
mobilization to restore fiscal sustainability, and rationalizing untargeted
subsidies to create space for higher
social spending.

Recent developments
Economic growth was estimated at 0.9 percent in 2023, a slight increase from 0.5 percent in 2022, as a result of limited fuel supply and mixed agricultural performance.
Limited fuel supply has contributed tohigher transportation prices and disrupted
trade and local production. Production of
diamonds, one of the country’s most important commodity exports, fell by 6.7 percent in FY2022/23 due to the decline of international demand for natural diamonddue to synthetic diamond surge. However,a shift of artisanal miners from the diamondto the gold sector and a relative rise in theprice of gold helped to boost the productionof gold. Official timber and sawn wood production would have increased in 2023, drivenbyimprovementsinsecurityconditions,secured contracts with key bilateral partners, and a slight rebound in international
prices for logs and sawn wood. Persistent
power shortages continued to hold back theindustrial sector while the services sector
suffered from higher transportation prices.
Despite rising transportation costs, inflation
fell from 5.6 percent in 2022 to 3.0 percent in
2023,itslowestlevelsince2021.
Tight budget constraints due to lack ofgrowthandelevatedtransportationpricesreduced households’ purchasing power, worsened food insecurity, and slowed poverty reduction efforts. Poverty remains elevated,with an estimated 65.9 percent of the population living in extreme poverty in 2023
(i.e., below the international poverty lineof US$2.15 per person per day, 2017 PPP).

FIGURE 1 Central African Republic / Real GDP growthand contributions to real GDP growth

FIGURE 2 Central African Republic / Actual and projected
poverty rates and real GDP per capita

Percent, percentage points
5

Poverty rate (%)

4

90

3

80

2

70

1

60

0

50

-1

40

-2

30

-3

20

-4

10

2021

2022

Real GDP per capita (constant LCU)

100

2023

Private consumption
Gross fixed investment
GDP (market price)

2024

2025

300000250000200000150000100000
50000

0

2026

0
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Government consumption
Net exports

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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The extreme poverty rate is set to increase by
one percentage point over the next two
years, due to negative per capita growth.
The Bank of Central African States (BEAC)
maintained its tight monetary policy
stance during 2023 to contain inflationarypressures and support the external viability of the exchange rate arrangement. The
BEAC policy rate was maintained at five
percent following a cumulative increase by
175 basis points between November 2021
and March 2023. Weekly liquidity injections were discontinued in early 2023 andBEAC stepped up its liquidity absorption
operations. CAR’s indicators of financial
soundness remain broadly adequate, although the non-performing loan ratio deteriorated and stood at 16.4 percent in
2023, compared to 15.5 percent in 2022.
While the overall fiscal balance continued
to improve in 2023, it remained structurally in deficit. Fuel shortages during the lastquarter of 2023 reduced petroleum tax collection and dampened recent tax recovery
efforts. Domestic revenue mobilization(DRM) efforts, including the implementation of the new tax on electronic communications, combined with moderation of current spending and expanded external
grant financing enabled a reduction in theoverall fiscal balances in 2023. Public debt
increased to 55.7 percent of GDP in 2023 in
the form of issuance of net domestic bonds.

In 2023, domestic debt is estimated toreach 21 percent of GDP. Yields on 3-year
issuances have hovered around 11 percent,among the highest in CEMAC.
The current account deficit improved to 9
percent of GDP in 2023, mainly due to a 14.4
percent improvement in the terms of trade.
However, a lack of competitiveness, coupled with commodity price shocks and aweak linkages with global value chains, continued to weigh on the external position.

OutlookThe medium-term outlook shows gradualimprovement in economic performancebut is vulnerable to headwinds. Real GDP
growth is projected to recover gradually,reaching 1.3 percent in 2024 before averaging 1.8 percent in 2025-26, partly due tothe base effect and contingent on the second disbursement of budget support fromthe African Development Bank (AfDB) andthe implementation of policy adjustments
to pave the way for improved fuel supply.
Inflation is expected to be above the regional ceiling in 2024 and remain elevatedin the medium term. Poverty is expected toremain high due to declining per capita income, relatively high food prices, and theweak economic recovery.

TABLE 2 Central African Republic / Macro poverty outlook indicators

The overall fiscal balance is projected togradually improve from 2024 to 2026, provided that DRM efforts continue, particularly in improving the collection of taxes, especially VAT, and miscellaneous revenues
through a treasury single account (TSA) system. Under these circumstances, domestic
revenue could reach pre-war levels for the
first time in 2026. The country is expected toremain at high risk of external debt distressand overall debt distress, although public
debtisprojectedtoremainsustainable.
The current account balance is projected to
improve but remain in significant deficit.
Thebalanceofpaymentsisprojectedtoshow
a financing gap of roughly 1 percent of GDP
peryearinthemediumtermwhichwouldbe
coveredbybridgefinancingfromtheregional market, possible disbursements of budget
support from donors, and disbursements
undertheIMF’songoingECFprogram.
Risks to the outlook remain tilted to thedownside and include: (i) a reversal of security gains that could jeopardize economic growth and the pathway out of fragility;(ii) persistent pressure on food and transportation prices that could slow down
poverty reduction efforts; (iii) failure to implement bold and agreed policy reforms
under the ECF program, which could delay expected disbursements, dampen
donor appetite for budget support andlead to a possible accumulation of arrears.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.0
1.3
-3.8
-15.9
-5.3
-11.5

2022
0.5
0.0
-8.2
-4.5
2.6
-5.5

2023e
0.9
1.2
3.5
-1.5
9.0
5.5

2024f
1.3
3.3
-4.5
0.2
5.2
7.3

2025f
1.7
2.5
-4.4
9.8
9.0
9.9

2026f
1.9
2.7
-1.9
3.2
5.4
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.5
2.7
-1.7
2.2

1.0
2.2
-3.9
2.4

0.9
2.3
-0.5
0.5

1.3
2.5
1.3
0.3

1.7
2.9
1.8
0.6

1.9
3.1
2.1
0.9

Inflation (consumer price index)
Current account balance (% of GDP)

4.3
-11.1

5.6
-12.7

3.0
-9.0

4.7
-7.7

4.6
-6.7

3.8
-5.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.0
13.7
48.6
-5.7

-5.3
12.3
54.2
-4.9

-3.5
14.4
55.7
-2.9

-3.1
13.9
55.6
-2.2

-1.8
16.1
54.5
-0.9

0.1
18.2
50.7
0.9

65.7
85.8
96.2

65.3
85.6
96.1

65.9
86.2
96.4

66.2
86.1
96.4

66.8
86.7
96.5

67.3
87.1
96.7

0.6
0.4

0.1
0.4

0.0
0.4

-0.1
0.4

0.0
0.4

0.0
0.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.
MPO

17

Apr 24

CHAD

Key conditions andchallenges

Table 1

2023

Population, million

18.3

GDP, current US$ billion

13.2

GDP per capita, current US$

722.4

International poverty rate ($2.15)

a

30.8
a

62.8

a

88.8

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

37.4

School enrollment, primary (% gross)

b

90.4

b

52.5

Total GHG emissions (mtCO2e)

121.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2022), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Chad’s economy has proven resilient despite the war in neighboring Sudan. GDP
growth in 2023 is estimated at 4.1 percent (1 percent per capita), supported byhigher oil production and public investment. Improved agricultural production
eased inflation to 4.1 percent. While thepoverty rate has declined, 5.5 million people still live in extreme poverty. Downside risks include uncertainty from thepolitical transition, regional instability,
insecurity, and climate shocks.

Chad’s economic growth has been volatile andweak, reflecting the lack of economic diversification and dependence on the oil sector, which
accountsfor85percentofexportsand56percent
of fiscal revenues. Chad is also among theworld’s most vulnerable countries to climatechange.Insufficientrainsandfrequentflooding
have often had adverse impacts on the agricultural sector, the main sector of employment,
which, together with conflict and displacement, has led to chronic food insecurity.
Security remains precarious with threatsby Boko Haram in the Lake Chad region,
the armed FACT rebellion in the north, andescalating inter-community tensions. According to UNHCR, Chad was hostingnearly one million forcibly displaced persons at the end of 2022, including 593,000
refugees and nearly 400,000 IDPs. Since
April 15, 2023, the war in Sudan has caused
a mass influx of Sudanese refugees and Chadian returnees to eastern Chad. The numberof new arrivals was estimated at around496,834 at end-December 2023. In addition
to the humanitarian challenges, the war in
Sudan has induced higher expenditures(mostly military) and shortages of goods.

Recent developments
Despite the ongoing humanitarian crisis
triggered by the war in Sudan, Chad’s

economy is poised for its strongest, albeit
still modest, performance since 2014, withan estimated GDP growth of 4.1 percent(1 percent per capita) in 2023. This
growth is underpinned by oil production,
which is expected to rise by 4.4 percent.
Non-oil GDP is estimated to grow 4.1
percent (up from 2 percent the previousyear) driven by public investment. After
recovering from the 2022 floods, the agricultural sector is estimated to contribute
1.6 percentage points (ppts) to growth,followed by the services (1.4 ppts) andindustry (1 ppt) sectors. Investment, primarily government-driven, is the main
growth driver on the demand side, contributing 7 ppts to growth. In contrast,
private investment is expected to havefallen due to increased interest rates andcrowding out effects. The boom in public
investment (+195.9 percent) led to a sharp
increase in domestic demand (+9.5 percent). This in turn increased imports,
along with other imports for humanitarian-related operations in support of the
Sudanese refugees, and by significantly
more than exports (imports +16 percent
vs. exports +2.9 percent), resulting in acurrent account deficit of 2.4 percent of
GDP in 2023.
Inflation eased to 4.1 percent in 2023, owing to the base effect of high inflation in
2022 and the deceleration in food inflation(4.8 percent) because of improved agricultural production. Food insecurity remains
a significant problem despite these improvements, with around 2.1 million people, or 11.5 percent of the population, facing severe food insecurity as of December
2023. The extreme poverty rate is expected

FIGURE 1 Chad / GDP growth, current account, and fiscal
balance

FIGURE 2 Chad / Actual and projected poverty rates andreal GDP per capita

Percent of GDP
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
2021
2022
Fiscal balanceReal GDP growth

Poverty rate (%)

Real GDP per capita (constant LCU)

100

4500009040000080

35000070

30000060

250000502000004015000030
20100000

10

50000

0

2023

2024
2025
2026
Current account balance

0
2011

2013

2015

2017

2019

International poverty rate
Upper middle-income pov. rate

Source: World Bank.

Source: World Bank. Notes: see Table 2.

MPO

18

Apr 24

2021

2023

2025

Lower middle-income pov. rate
Real GDP pc

to decrease by 1 ppts to 29.9 percent in
2023; however, about 30 percent of the
population (5.5 million people) continue
living in extreme poverty.
The Bank of Central African States (BEAC)
maintained its tight monetary policy
stance during 2023 to contain inflationarypressures and support the external viability of the exchange rate arrangement. The
BEAC policy rate was maintained at five
percent following a cumulative increase by
175 basis points between November 2021
and March 2023.
Chad maintained a fiscal surplus of 1.3
percent of GDP in 2023, equivalent to a
non-oil fiscal deficit of 15.8 percent, andfalling from a 5 percent of GDP fiscal surplus in 2022. Despite high growth in tax
revenues, supported by tax administration
digitalization measures, and a peak in oilrevenue, the fiscal surplus declined, reflecting the sharp rise in public investment.
Total public debt is estimated to decline to44.8 percent of GDP in 2023, compared to47.4 percent in 2022.

OutlookIn 2024, growth is projected to decelerate
to 2.7 percent (-0.4 percent per capita) due
to an expected decline in oil productionand expectations of lower public investment, compared to 2023 levels. During2025-2026, growth is projected to average
3.1 percent (0.1 percent per capita), as newoil fields are brought onstream. Non-oil
GDP growth is projected at around 3.5 percent over 2024-2026. Government measures addressing food insecurity shouldease food inflation, with inflation projected
to fall to 3.9 percent in 2024 as a result, before averaging 3.3 percent over 2025-2026.
With few linkages to poor and vulnerable
populations, oil-sector driven growth is
not expected to lead to poverty reduction
without significant structural reforms.
Moreover, continued security restrictions,
low social protection coverage, and theongoing Sudan crisis will restrict poverty

TABLE 2 Chad / Macro poverty outlook indicators

reduction. Extreme poverty is projected
to increase by 0.5 ppt in 2024, equivalent
to an additional 263,671 people falling into extreme poverty.
Reflecting lower oil prices and still elevated levels of government expenditures, thefiscal balance is projected to turn into a
1.4 percent of GDP deficit in 2024, remaining in deficit through to 2026. Public debt
to GDP is projected to decline to 41.6 percent in 2025 and stabilize in the medium
term. The current account deficit is expected to further deteriorate to 3 percent of
GDP in 2024, and average 3.1 percent over
2025-2026, driven by moderating oil prices.
The outlook is subject to multiple downside risks, including lower oil prices, political instability during the upcoming elections, heightened insecurity, and climate
shocks. A prolonged Sudan war could
worsen the humanitarian crisis, strain public finances, and increase inflationary pressures. Moreover, an escalation of tensions
between Chad and Sudan could lead toconsiderable security concerns.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
-1.2
1.6
3.7
-4.3
-0.4
5.1

2022
2.8
2.7
-1.5
-6.1
5.0
2.0

2023e
4.1
1.9
1.1
62.8
2.9
16.0

2024f
2.7
3.6
0.4
-17.2
3.8
-3.1

2025f
3.3
3.2
3.0
-2.1
4.1
2.0

2026f
2.9
2.3
3.1
-0.4
4.2
2.1

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-1.2
6.2
-4.6
-4.3

2.8
2.0
4.1
2.3

4.1
5.0
3.3
4.1

2.8
3.1
1.1
3.9

3.3
3.4
2.0
4.4

2.9
3.3
1.7
3.5

Inflation (consumer price index)
Current account balance (% of GDP)

1.0
-6.0

5.8
2.9

4.1
-2.4

3.9
-3.0

3.6
-3.3

3.0
-2.8

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.2
16.3
52.1
-0.6

5.0
23.5
47.4
6.5

1.3
27.1
44.8
3.0

-1.4
22.3
42.3
-0.5

-1.2
22.6
41.6
-0.3

-2.1
21.8
41.9
-1.2

..
..
..

30.8
62.8
88.8

29.9
61.6
87.8

30.4
62.4
88.4

30.8
62.9
88.7

30.9
63.1
88.7

2.0
1.2

2.1
1.2

2.0
1.2

2.1
1.2

2.0
1.2

1.9
1.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2022-EHCVM. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO

19

Apr 24

COMOROS

Key conditions andchallenges

Table 1

2023

Population, million

0.9GDP, current US$ billion

1.3

GDP per capita, current US$

1520.5International poverty rate ($2.15)

a

18.6
a

39.5

a

68.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

45.3

School enrollment, primary (% gross)

b

106.2

b

63.4

Total GHG emissions (mtCO2e)0.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2017 PPPs.
b/ Most recent WDI value (2021).

The Comoros’ economy continues to recover following the resumption of private
consumption and investments in tourism
and transport infrastructure. Growth isexpected to average 3.9 percent over2024-26, compared to 2.8 percent in2022-23. The poverty rate has remained
high at 38.2 percent (using the lower
middle-income poverty threshold). Policy
priorities include fiscal consolidation andreforms to improve financial intermediation, and enhance the business climate
and access to basic services.

Economic growth slowed to 1.9 percent
over 2019-23, below already anemic longterm growth, which averaged 2.7 percent
over the previous two decades. This recent poor growth performance is mainly
due to multiple natural and external
shocks, including Cyclone Kenneth in2019, the COVID-19 pandemic, and the2022 global commodity price shock. As aresult, poverty remains high at 38.2 percent in 2023 (using the lower middle-income poverty rate threshold). The Comoros’ growth is driven by private consumption fueled by remittances as they
support “grands marriages.” Low anddeclining productivity, limited investment and fiscal space, and underperforming state-owned enterprises (SOEs) also
weigh on growth. Even though public
debt is assessed as sustainable, the Comoros is at high risk of public debt distress, largely reflecting the issuance of
non-concessional loans.
Due to red tape, the dominance of stateowned enterprises, and limited market
competition and challenges in accessing
finance, private sector development isweak, constraining job creation. Low levels of human and physical capital andmisallocation of resources have hindered growth in the tourism and fisheries sectors, which hold high potential
for job creation. Labor force participation is also constrained by weak labor

FIGURE 1 Comoros / Public debt, fiscal and current accountbalances
Percent of GDP
45

20570000-1

70

560000

-2

60

-4

15

-5
-6

0
2020

2021e 2022f 2023f 2024f

Debt (lhs)
Current account balance (rhs)2025

54000050

53000040

52000030510000500000490000

10

-7
2019

55000020

10
5Real GDP per capita (constant LCU)

80

-3

25

The economy expanded by an estimated 3
percent in 2023 as domestic activities were
supported by the resumption of “grands
marriages” and the associated increase indiaspora community arrivals, primarily
from France. Public servant salary hikes
in January 2023 aimed at preserving purchasing power, a high level of remittances,and higher public investment supported
domestic demand. On the supply side, theconstruction sector benefited from increased public spending, while the primary sector benefited from higher agricultural prices and favorable climate conditions.
As inflationary pressures from imported
food and energy products moderated, inflation declined from 12.4 percent in 2022
to 9.2 percent in 2023. An increase of 50 basis points in the key monetary policy rate

Poverty rate (%)

35
30

Recent developments

FIGURE 2 Comoros / Actual and projected poverty rates
and real GDP per capita

Percent of GDP
040

market institutions and persistent formsof wage discrimination against women.
A low employment intensity of growth
and weak economic growth contribute to
the high poverty level, which is a source offragility for the Comoros. Furthermore, recent shocks have highlighted the Comoros’
vulnerabilities and the need to implement
reforms that increase productivity and private investment to promote growth. These
include reforms to improve the businessenvironment and increase financial intermediation. Higher public investment, including in infrastructure, is also needed
to attract larger private investments, including foreign direct investment.

48000002026

4700002014

Fiscal balance (rhs)

Sources: National authorities and World Bank estimates and forecasts.

2016

2018

2020

20

Apr 242024

2026

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2022

in July 2023 and lower credit growth inresponse to liquidity management operations also helped decrease inflation.
Stronger domestic demand translated intohigh import demand and contributed to
the widening of the current account to 5.8
percent of GDP in 2023 (from 0.5 percent in2022). However, international reserves remained at adequate levels as the Comoros
received exceptional financing from international financial institutions.
The fiscal deficit continued to widen in2023 to an estimated 4.4 percent of GDP,
despite improved domestic revenue mobilization. The deterioration of the fiscal position by 0.4 percentage points of GDP in
2023 was mainly driven by a large increasein public spending of 3.5 percentage points
of GDP, particularly higher public capital
expenditures. Public debt stock reached38.2 percent of GDP at end-2023, comparedwith 34.0 percent of GDP at end-2022.
Compliance with quantitative fiscal targets
under the four-year International Monetary Fund Extended Credit Facility program approved in June 2023 is expected tohelp improve fiscal outturns and containthe increase in public debt.
The January 2024 presidential election was
followed by post-electoral demonstrations,which weighed on economic activities andslowed progress on the implementation of
public projects and policy.

Outlook
The economic recovery from the COVIDrelated slowdown is expected to continue, with growth reaching 3.3 percent in
2024 and 4.2 percent over 2025-26, driven
primarily by private consumption andpublic investment. The construction of
the El Maarouf hospital and the Galawa
hotel, as well as the construction or
restoration of roads and ports, should
support the economic recovery. In themedium term, productivity growth is expected to benefit from the 2023 energy
law, which promotes the production ofelectricity from renewable sources. The
creation of a credit registry and a partial
credit guarantee scheme, as well as theoperationalization of the leasing law in
2024-25, are also expected to support therecovery in 2025-26. The poverty rate is
expected to decrease slowly to 36.2 percent in 2026 as the economy continues toexpand more rapidly.

TABLE 2 Comoros / Macro poverty outlook indicators

Lower imported inflation would contribute to lower headline inflation of
2.2 percent in 2024. Lower global commodity prices and improvements inthe monetary policy framework would
also help reduce inflation. The current
account deficit is expected to average
5.5 percent of GDP over 2024-26, as
major public investments contribute to
the widening of the trade deficit to an
average of 20 percent of GDP. Public debt is projected to reach 38.2 percent of GDP by 2026. Fiscal consolidation, enhanced SOE performance monitoring, and increased expenditure efficiency are expected to reduce the fiscal
deficit to 2.2 percent of GDP by 2026.
The outlook faces significant downside risks related to the impact of the2024 elections on the pace of execution of investment projects and delays in the implementation of key fiscal and governance reforms during
the first half of the year. Concomitantly, contingent liabilities threaten
debt sustainability. Other downside
risks include the cholera outbreakin February 2024, prolonged global
geopolitical tensions, and the occurrenceof natural disasters.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.1
1.0
5.0
9.6
48.2
7.7

2022
2.6
0.2
5.4
2.0
22.6
4.2

2023e
3.0
1.9
11.6
8.0
-4.2
3.0

2024f
3.3
3.2
0.7
4.8
5.1
3.7

2025f
4.0
3.6
4.5
6.8
6.5
5.6

2026f
4.3
3.6
5.4
2.9
6.5
3.2

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.0
3.4
-0.2
1.8

2.4
3.3
0.4
2.4

3.0
4.7
2.3
2.4

3.3
4.3
1.0
3.2

4.0
4.6
1.5
4.2

4.2
5.0
3.0
4.1

Inflation (consumer price index)
Current account balance (% of GDP)

0.0
-0.5

12.4
-0.7

9.2
-5.8

2.2
-5.8

2.3
-5.4

2.2
-5.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.8
17.0
29.8
-2.5

-3.9
14.2
33.7
-3.7

-4.4
17.4
38.2
-4.0

-3.2
17.2
39.9
-2.9

-2.5
15.7
39.1
-2.2

-2.2
15.7
38.7
-1.9

18.2
39.0
68.2

18.1
38.5
67.9

18.1
38.2
67.2

17.9
38.1
66.7

17.4
37.0
65.7

16.8
36.2
64.8

2.1
48.7

2.1
48.8

2.1
49.0

2.2
49.1

2.3
49.3

2.1
49.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2015-EESIC. Actual data: 2014. Nowcast: 2015-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2014) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

MPO

21

Apr 24DEMOCRATIC
REP. OF CONGO

Key conditions andchallenges

Table 1

2023

Population, million

102.3

GDP, current US$ billion

64.4

GDP per capita, current US$

629.5

International poverty rate ($2.15)

a

78.9
a

92.1

a

97.7

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

44.7

School enrollment, primary (% gross)

b

122.4

b

59.2

Total GHG emissions (mtCO2e)

691.7

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2020), 2017 PPPs.
b/ Most recent WDI value (2021).

Following a strong recovery at 8.9 percent in 2022, the DRC’s economy is estimated to have slowed down in 2023 but
remained resilient. The terms-of-trade deterioration and higher imports would
maintain high current account and fiscal
deficits and put pressure on the domestic
currency with strong pass-through to inflation. Prospects for growth and poverty
reduction are favorable, but subject todownside risks related to commodity priceshocks and geopolitical conflicts.

The Democratic Republic of the Congo(DRC), home to the second largest rainforest in the world and vast metal deposits, has yet to leverage its natural
wealth to spur economic development.
DRC’s exports are highly concentrated
with copper and cobalt accounting for
80 percent of the total (40 percent of
which headed to China). With its agricultural potential untapped, DRC is a
net food importer, increasing vulnerabilities to external shocks. Political instability, weak institutional capacity, poor
governance, and frequent bouts of violence have all contributed to undermining DRC’s foundations of a robust anddiversified economy. These issues have
not only deterred the creation of economic opportunities but also contributed
to escalating poverty levels, particularly
with a rapidly growing population. Persistent structural constraints result in anunderdeveloped private sector and a large
informal economy. Climate-related shocks,
including floods and droughts, and the associated infrastructure damage add tothese challenges.
Poverty remains widespread, with thebulk of the poor living in extreme poverty.
Significant geographical disparities inpoverty exist, with extreme poverty concentrated in the central and northwesternareas and the largest number of poor in
Eastern provinces. DRC remains second in

Sub-Saharan Africa after Nigeria in termsof the number of extreme poor despitesome improvements in the past decades.
The December 2023 elections have led toa second 5-year term for incumbent President Tshisekedi, but a majority is yet
to be negotiated in Parliament to forma government. Reaching political consensus and increasing the presence and credibility of the state, including through improved governance, are key to maintaining stability and peace, and advancing
structural reforms that will attract investments and create jobs. The imperative forthe state to enhance service delivery to
citizens, alongside preserving macroeconomic stability, underscores the importance of boosting domestic revenue mobilization to expand fiscal space.

Recent developments
The DRC economy expanded by 7.8
percent in 2023 (2022: 8.9 percent),
supported by a strong mining sector,
which grew by 15.4 percent, contributing around 70 percent to overall
growth in 2023. DRC copper andcobalt production increased by 18.7
and 21.2 percent, respectively, in 2023
(2022: 33.2 and 24.0 percent, respectively), reflecting ongoing expansionsof production at relevant mines. Nonmining GDP grew by 3.6 percent in
2023, led by the construction and services sectors. Agriculture production
slowed to 2.2 percent in 2023 (from2.4 percent in 2022). On the demand

FIGURE 1 Democratic Republic of Congo / Real GDP
growth and contributions to real GDP growth

FIGURE 2 Democratic Republic of Congo / Actual andprojected poverty rates and real GDP per capita

Percent, percentage points
10

Poverty rate (%)

86Real GDP per capita (constant LCU)

100

1800009016000080

1400007012000060

4100000

50

2

40

0

30

-2

80000
60000

20

40000

10

20000

0

-4
2020

2021

Non-Mining

2022

2023e

Mining sector

2024f

2025f

2026f

SSA growthGDP

Sources: Democratic Republic of Congo statistical authorities and World Bank.

MPO

0
2012

2014

2016

2018

2020

Apr 242024

2026

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

22

2022

side, growth was led by private investment
and exports, while inflationary pressurescaused private consumption to contract,
potentially impacting poverty reduction.
Extreme poverty is estimated at 74.6 percent in 2023, a 1.4 percentage points decrease compared to 2022.
The current account deficit (CAD) further deteriorated to 6.3 percent of GDP
in 2023, from 4.9 percent in 2022, owing
to higher imports. Nevertheless, FDI
and external financing contributed tobuild up foreign reserves, reaching 8.9
weeks of imports in 2023 (2022: 7.7
weeks). However, the exchange rate depreciated by 21.6 percent in 2023 andinflation accelerated to 19.9 percent on
average in 2023 (up from 9.2 percent in2022) despite the central bank’s intervention in FX market and its contractionary monetary policy during the second half of the year (raising the policy
rate from 11 to 25 percent).
The security and elections spendings
caused the fiscal deficit to widen to
1.7 percent of GDP in 2023 (from 0.3
percent in 2022), amid softening domestic revenues, due to lower cobalt
prices and declining windfall taxes.
The fiscal deficit was partly fundedby treasury bills/bonds and external
concessional borrowing.

OutlookGDP growth is expected to moderate to
6.0 percent in 2024 and to stabilize around
5.8 percent over 2025-26. The mining sector
will continue to drive growth. Moreover,non-mining sectors (mainly services andmanufacturing) will gradually support
growth in the medium term with a growthrate of 5.5 percent by 2026. On the demandside, government consumption and investment and, to a lesser extent, private consumption shall support growth in themedium term.
The fiscal deficit is projected at 2.0 percent of GDP in 2024, driven by securityrelated spending, before narrowing to 0.2
percent in 2026. Gross fixed capital investment is expected to drop in 2024 aslower domestic revenue and higher expenditures -attributed to outgoing and incoming administrations- leave a narrow
scope for relevant budget allocation. Despite rising imports of capital goods, thecurrent account deficit will narrow to 3.5
percent of GDP in 2024-26 thanks to improved terms of trade associated with favorable commodity prices. Furthermore,
FDI inflows will contribute to building up
reserves and maintaining exchange rate

TABLE 2 Democratic Republic of Congo / Macro poverty outlook indicators

stability while the inflation rate (end-ofperiod) is expected to decline towards its
7 percent medium-term target.
Extreme poverty is projected to further
decrease reaching 72.4 percent by 2025
given favorable economic prospects, despite the lasting negative effects of thepandemic, high population growth, andwar in Ukraine.
DRC’s economy remains subject to downside risks given its vulnerability to commodity price swings and growth performance of major trading partners whichmight be disturbed by geopolitical conflicts. The continued economic consequences of the war in Ukraine, through rising global commodity prices, could exert
stronger pressure on the fiscal deficit, inflation, and households’ consumption, thus,
exacerbating poverty and inequality.
In addition, with the agriculture sector
employing over 60 percent of the working force, the vulnerability to climatechange-related risks (floods, droughts) is
substantial. Finally, an escalating war in
the East and continued political volatility could undermine the ability to advance with ambitious structural reforms
efforts. To mitigate these risks, DRC’s
immediate challenge is to strengthen security and maintain political and macroeconomic stability.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.2
1.6
11.8
7.7
11.7
5.4

2022
8.9
10.1
25.1
5.7
25.0
18.0

2023e
7.8
-1.6
-9.2
17.8
24.9
13.1

2024f
6.0
8.6
4.0
0.3
8.9
5.3

2025f
5.9
5.5
8.9
4.6
3.7
3.4

2026f
5.7
6.5
4.6
4.0
2.5
3.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.2
2.4
7.8
5.8

8.9
2.4
16.1
2.7

7.8
2.2
13.0
2.9

6.0
2.5
7.2
5.6

5.9
2.5
6.4
6.4

5.6
2.5
5.3
7.3

Inflation (consumer price index)
Current account balance (% of GDP)

9.0
-0.4

9.3
-4.9

19.9
-6.3

17.2
-4.3

14.5
-3.3

10.5
-2.9

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-1.7
12.1
24.0
-1.4

-0.3
16.9
24.0
0.0

-1.7
14.2
23.7
-1.4

-2.0
13.4
22.8
-1.7

-0.7
13.9
21.5
-0.4

-0.2
14.6
19.8
0.1

77.9
91.6
97.6

76.0
90.6
97.2

74.6
89.8
97.1

73.4
89.5
96.9

72.4
89.1
96.8

71.5
88.8
96.7

0.3
1.4

0.1
1.4

0.1
1.4

0.1
1.4

0.2
1.4

0.2
1.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2020-EGI-ODD. Actual data: 2020. Nowcast: 2021-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2020) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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23

Apr 24

REPUBLIC OFCONGOTable 1

Key conditions andchallenges
2023

Population, million

6.1

GDP, current US$ billion

15.3

GDP per capita, current US$

2506.0International poverty rate ($2.15)

a

35.4
a

59.1

a

83.5

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

48.9

School enrollment, primary (% gross)

b

87.7

b

63.5

Total GHG emissions (mtCO2e)

34.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2011), 2017 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2021).

Theeconomyisgraduallyrecovering,but
growthremainedmodestatanestimated1.9
percentin2023,drivenbynon-oilactivities.Theongoingfuelsubsidiesreformis
helpingtomaintainfiscalsurplusesbuthas
alsocontributedtoatemporaryincreasein
inflation,whichisprojectedtoreturntothe
3.0percenttargetby2025.Growthprospects,albeitimproved,remainvulnerabletounsteadyoilproduction,volatileoil
prices,delayedstructuralreformimplementation,andadverseweatherconditions.

Between 2015 and 2023 the Republic ofCongo’s (ROC) real GDP annual growth
averaged -1.9 percent, while its GDP per
capita contracted by a cumulative 32.3 percent. The 2014-16 collapse in oil prices
plunged the economy into a prolonged recession as a result of a massive cut in public spending and the accumulation of domestic arrears to private sector firms,
which impacted private investment. The
COVID-19 crisis further exacerbated theeconomic recession. GDP per capita has
now regressed to levels of the early 1970s,
just a decade after gaining independence.
The decline in per capita income levels
since 2015 have resulted in extreme poverty incidence (less than US$2.15 PPP perday) increasing from 33.5 percent in 2015
to 46.6 percent in 2022.
The country’s high levels of non-concessional borrowing in a context of relianceon volatile oil revenue and weak governance, led its debt to be classified as “indistress” and unsustainable in 2017, withits debt-to-GDP ratio increasing from 42.3
percent in 2014 to 103.5 percent in 2020.
Higher oil prices, improved debt management, and debt restructuring agreements helped restore debt sustainability
in the second half of 2021, but Congo remains in debt distress due to the ongoing restructuring and audit of domestic
arrears as well as the recurrent accumulation of temporary external arrears.

FIGURE 1 Republic of Congo / Real GDP growth

The enduring reliance on oil revenues has
left the economy vulnerable to oil pricevolatility and weakened long-term growthprospects. Attaining sustainable development in Congo urgently requires efforts todiversify national assets, focusing onstronger institutions, development of human and physical capital, and a more balanced exploitation of natural capital.

Recent developments
Driven by the non-oil sector, economic activity in Congo is estimated to have increased by 1.9 percent in 2023, compared
to an estimated 1.5 percent in 2022. Non-oil
growth, estimated at 2.8 percent in 2023,
was broad-based, spurred by agriculture,
manufacturing (including beverages, sugar, and cement), and services (including
restaurants and hotels, transport, and postand electronic communications). The oil
sector, on the other hand, underperformed
with production declining for the fourthconsecutive year in 2023 by 0.5 percent,due to technical challenges and maturing
oil fields. Despite a drop in oil revenues
due to lower oil prices and oil production,
the budget posted a surplus in 2023. Fiscal
discipline and strong reforms such as the
30 percent increase in gasoline retail prices
since January 2023 and a new requirement
on dividends payment from state-owned
enterprises helped sustain the budget surplus estimated at 3.6 percent in 2023. Lower export receipts and increased imports
reduced the current account surplus to an
estimated 2.1 percent of GDP in 2023.

FIGURE 2 Republic of Congo / Actual and projected
poverty rates and real GDP per capita

Percent change
6

Poverty rate (%)

4

90

2

80

Real GDP per capita (constant LCU)

100

1200000
100000070

0800000

60

-2

50

-4

600000

40

-6

30

-8

20

-10

10

400000200000

0

-12
2019

2020

2021e 2022e 2023e

Oil GDP

Non-Oil GDP

2024f

2025f

0
2011 2013 2015 2017 2019 2021 2023 2025

2026f

Real GDP

Source: World Bank.
Note: Oil GDP growth rate in 2026 is projected at -0.1.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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24

Apr 24

The banking sector remains solvent, butvulnerability to non-performing loans(NPLs) remains high. Bank deposits andcredit to the private sector were up asof end-August 2023 (y-o-y), and while
the NPL to gross loan ratio has improved to 17 percent at end-August2023(compared to 19 percent a year ago), it
remains elevated. The Bank of Central
African States (BEAC) maintained its
tight monetary policy stance during2023 to contain inflationary pressuresand support the external viability of theexchange rate arrangement. The BEAC
policy rate was maintained at five percent following a cumulative increase by
175 basis points between November
2021 and March 2023.
Real GDP per capita growth remained
negative in 2023 and the poverty incidence consequently increased slightly toan estimated 46.8 percent. The fuel priceadjustment and increased domestic demand pushed up inflation to 4.3 percent in 2023. Food inflation decelerated in
2023 but remains elevated at 4.3 percent,which is likely to continue to affect thepoorer segments of the population moreas they typically spend a higher share of
their household budget on food.

Outlook
The Congolese economy is expected tocontinue its gradual recovery. GDP is expected to grow at 3.5 percent in 2024 andto average 3.4 percent in 2025-26. Oil sector growth (expected to average 2.7 percent in 2024-26) will be driven primarily by increased investments by oil companies, including in asset maintenance,and by new oil fields. Non-oil sector
growth (expected to average 3.9 percent
in 2024-26) will be spurred by growthin agriculture, non-oil industry and services, supported by the continued clearance of government arrears, gradual increase in social spending and public investment, and the implementation of reforms in governance and the businessenvironment. Growth will be further supported by the development of the gas sector, with commercial production and exportation of liquefied natural gas expected
to start in 2024. Inflation is expected to ease
to 3.8 percent in 2024 and to return to
BEAC’s 3.0 percent target by 2025.
The poverty rate is expected to marginallydecrease to 46.4 percent in 2024 and to an

TABLE 2 Republic of Congo / Macro poverty outlook indicators

average of 45.5 percent in 2025-26, consistent with projected growth in GDP per
capita. The fiscal balance is expected to remain positive, fueled by high oil prices, increased oil production, the commercialization of natural gas, the reduction in direct
oil subsidies to energy SOEs, and fiscal discipline. Although debt vulnerabilities remain elevated (with a high level of nonconcessional debt stock and domestic arrears), the debt-to-GDP ratio is projected
to decline to 81 percent by 2026 thanks to
improved debt management and fiscal discipline. The current account surplus isprojected to decline, and to turn into a
deficit by 2026, due to lower oil export
receipts and increased imports to support
investment, including for growing nonoil economic activities.
The economic recovery remains fragile asrisks are tilted to the downside. Risks include volatile global oil prices and unsteady oil production, persistent highfood inflation or refined oil shortages inCongo as part of spillover from conflicts
elsewhere, weaker-than-expected global
demand, further tightening of global orregional financial conditions, adverse
weather conditions and delayed structuralreforms implementation.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021e
1.0
11.5
2.1
14.0
-1.0
25.0

2022e
1.5
5.0
-5.0
10.0
-0.7
5.9

2023e
1.9
4.9
0.6
8.6
1.0
8.9

2024f
3.5
4.9
1.8
8.6
4.2
8.5

2025f
3.7
5.0
1.6
5.6
4.5
7.0

2026f
3.2
5.1
1.6
5.4
1.9
5.0

Real GDP growth, at constant factor prices
Agriculture

1.0
1.9

1.5
3.0

1.9
2.8

3.5
3.2

3.7
3.4

3.2
3.7

-3.3
2.0

-0.6
3.1

0.7
2.9

4.5
3.1

4.8
3.2

3.2
3.4

Industry
Services
Inflation (consumer price index)

2.0

3.0

4.3

3.8

3.0

3.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

8.9
0.3

18.7
0.5

2.1
4.1

1.5
4.5

0.4
4.7

-0.7
4.8

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

1.2
21.1
92.1
3.1

7.9
28.6
86.6
10.2

3.6
24.3
96.0
6.4

3.9
25.5
91.3
6.6

3.2
25.2
85.9
5.8

3.1
24.8
81.0
5.7

46.4
70.6
90.6

46.6
70.9
90.7

46.8
71.0
90.8

46.4
70.7
90.6

45.6
70.2
90.4

45.4
70.1
90.3

3.2
14.0

3.2
14.7

3.3
14.8

3.4
15.1

3.4
15.4

3.3
15.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2011-ECOM. Actual data: 2011. Nowcast: 2012-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2011) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

MPO

25

Apr 24CÔTE D'IVOIRE
Table 1

2023

Population, million

28.9

GDP, current US$ billion

81.3

GDP per capita, current US$

2815.2

International poverty rate ($2.15)

a

9.7
a

38.4

a

76.4

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.3

School enrollment, primary (% gross)

b

94.6

b

58.6

Total GHG emissions (mtCO2e)55.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Amid global and regional turbulence andtight financial conditions, economic
growth has moderated slightly to 6.4 percent in 2023, while inflation remains elevated at 4.4 percent, driving a small increase in extreme poverty. Macroeconomic imbalances have eased owing to fiscal
consolidation and improved terms oftrade. Revenue-based fiscal consolidation
continues as terms of trade improve,strengthening debt sustainability. Medium-term structural and climate transition reforms should help sustain growtharound potential.

Key conditions andchallenges
The Ivorian economy demonstrated remarkable resilience against overlapping
global and regional crises, posting 7-percent
average growth (5.5 percent in per capita)
over 2021-2022, albeit short of pre-pandemic
performance. Nonetheless, increasing uncertaintyhasunderscoredtheneedforstructural reforms and increasing fiscal space tomovetowardstheobjectiveofdoublingGDP
per capita between 2020 and 2030. Creating
better-paid jobs and promoting more inclusive growth would require improving human capital, leveraging private investment,
and reducing allocative inefficiencies.
Short-term headwinds are high. Russia’s
invasion of Ukraine has fueled commodity
price volatility and macro-fiscal imbalances. Heightened market uncertainties,
tight monetary policy, and depreciated exchange rates have increased external anddomestic debt costs, requiring active debt
management and continued focus on domestic revenue mobilization. Global andregional insecurity may aggravate economic and fiscal pressures, with the recently announced withdrawal of three Sahelcountries from ECOWAS potentially affecting trade, market confidence, investment
flows, and borrowing costs. Increasing impact from climate change could cloud theoutlook. Upside risks rest on the rollout of
the national development plan, which requires adequate financing through greaterpublic and private investment.

Recent developments
Growth momentum slowed as geopoliticaltensions persisted, and financial conditions
tightened. Real GDP growth is estimated at
6.4 percent in 2023 (3.8 percent per capita)
down from 6.9 percent in 2022, driven bystrong public and private investment, fueled by the African Cup of Nations preparation. Conversely, private consumption softened, reflecting higher domestic fuel andelectricity tariffs (about +10 percent in January 2024) as the government has rolled backcrisis-related subsidies. Industry, including
construction, and services, supported supply-side growth, albeit at a slower pace, contributing 1.1 and 4.1 percentage points to2023 growth, respectively. Export-oriented
agriculture underperformed due to poor
weather, with output falling for cocoa(-10.4 percent), coffee and cottonseed(around - 60 percent).
Inflation averaged 4.4 percent in 2023, downfrom 5.2 percent in 2022, as increasing energy and transport inflation partially offset
slower food inflation. Core inflation was 3.2
percent, still above the central bank's 2 percent target and 1-3 percent band, reflecting
persistent effects of global supply chain disruptions and exchange rate depreciation. To
counter inflation across WAEMU countries,
the Central Bank of West African States(BCEAO) raised policy interest rates by a cumulative 150 basis points since mid-2022 to
3.5 percent for liquidity calls and 5.5 percent
for the marginal lending facility. However,inflation in the region (3.7 percent in 2023)
was still above the 1-3 percent target range

FIGURE 1 Côte d'Ivoire / Real GDP growth and contributions
to real GDP growth

FIGURE 2 Côte d'Ivoire / Actual and projected poverty
rates and real GDP per capita

Percent of GDP
20

Poverty rate (%)

15
10Real GDP per capita (constant million LCU)

100

1.8

90

1.6

80

1.4

70

1.2

60

5

1.0

50

0

0.8

40

0.6

30

-5
-10
2015

2017

Gov. cons.
Inventories
Statistical disc.

2019

2021

Exports
Private cons.
GDP

2023

2025

20

0.4

10

0.2

0

0.0
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

GFCF
Imports

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

26

Apr 24

and foreign exchange reserves have been on
a downward trend, estimated at 3.5 monthsof imports at end-2023, down from
4.3 months at end-2022.
Extreme poverty (less than $2.15 a day percapita at PPP 2017) is likely to reach 10.1
percent in 2023, a 0.4 percentage points increase from 2021. Expanding industry andservices, which employ 13.3 and 40.9 percent of the workforce, respectively, would
put downward pressure on poverty rates.
However, agriculture (employing 45.8 percent of the workforce, 76.6 percent of rural
workers, and 70.2 percent of the poor) is
likely to slow in 2023 and along with higher food prices, would offset the impacts ofgrowth in industry and services.
Frontloaded tax measures and phase-out ofcrisis-related energy and food subsidies
lowered the fiscal deficit to an estimated 5.2
percent of GDP in 2023 from 6.5 percent in
2022. Revenues increased by 1.3 ppt of GDP
y/y in the first eleven months of 2023 compared to 2022, primarily on higher tax revenues. Expenditure was contained as faster
capital expenditures and interest payments
were balanced by cuts in recurring expenditures. Two-thirds of the fiscal deficit wascovered by short-term issuances on the regional market and one-third by externalloans and budget support, keeping public

debt at around 60 percent of GDP. Substantial gains in terms of trade almost
closed the large trade deficit in 2023 which,combined with a lower fiscal deficit, narrowed the CAD to a forecast 5.8 percent of
GDP from 7.5 percent in 2022.

Outlook
Prudent macroeconomic policies, structural and climate-related reforms should
sustain robust growth in the short andthe medium term, albeit below pre-pandemic levels, amid persistent adverse
global and regional geopolitical trends.
Growth should rebound to 6.6 percent in
2024 (4.0 percent per capita), boosted by
the hosting in Q1 of the African Cup of
Nations and the start-up of the first operating phases of new oil and gas fields,
and average 6.5 percent in 2025-26. Sustained investment in network infrastructure, particularly in the digital and transport sectors, and higher oil extraction
should boost business confidence and increase productivity. Value chain development could increase agricultural productivity and bolster manufacturing, sustaining growth potential. Inflation should fall

TABLE 2 Côte d'Ivoire / Macro poverty outlook indicators

within the WAEMU’s 1-3 percent targetband by 2025.
Continued progress on domestic revenue
mobilization would sustain the realignment to the 3 percent regional fiscal deficit
target by 2025, stabilizing debt at around58 percent of GDP, and creating headroom
for sustained priority social and infrastructure spending above pre-pandemic levels.
The recent $2.6b Eurobond issuanceshould help tame short-term liquidity vulnerabilities and shore up external reserves.
Improving terms of trade and private sector-led export diversification should boost
the trade balance and, alongside the improved fiscal stance, narrow the CAD.
Downside risks include heightened global and regional tensions, notably an escalation of the Middle East crisis anduncertainties over the withdrawal of the
Sahel economies from ECOWAS, which
could dampen market sentiment, stunt
inflation reduction, tighten financing conditions, exacerbate debt vulnerabilities,
and squeeze the already low foreign exchange reserves. Extreme poverty should
stabilize at 10.2 percent in 2024, reflecting
strong growth, but held back by persistent post-pandemic inflation. Poverty reduction will resume in 2025, sustained by
growth and abated inflation.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
7.1
5.3
6.2
14.9
16.9
15.9

2022
6.9
5.1
10.6
14.6
4.9
1.3

2023e
6.4
2.6
9.0
14.9
8.9
10.5

2024f
6.6
3.8
7.4
14.6
6.0
9.5

2025f
6.5
4.3
7.1
10.5
6.5
7.0

2026f
6.5
4.3
7.1
9.9
7.0
6.7

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.1
7.3
4.9
6.2

7.3
4.7
8.1
7.9

6.2
4.0
5.8
7.2

6.6
4.3
6.2
7.5

6.5
4.4
6.5
7.2

6.5
4.8
6.6
7.0

Inflation (consumer price index)

4.2

5.2

4.4

3.6

3.0

2.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-4.5
1.5

-7.5
1.3

-5.8
1.6

-4.0
2.2

-3.4
1.9

-3.3
1.7

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.8
15.7
51.4
-2.9

-6.6
14.9
56.5
-4.4

-5.2
16.2
58.0
-2.8

-4.0
16.8
58.2
-1.7

-3.0
17.2
58.0
-0.6

-3.0
17.5
56.9
-0.7

9.7
38.4
76.4

9.8
38.3
76.1

10.1
38.1
76.0

10.2
37.6
75.1

10.0
36.7
74.1

9.6
35.4
72.8

2.7
25.0

1.5
25.3

0.6
25.0

0.6
24.5

0.8
24.2

1.7
24.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO

27

Apr 24EQUATORIALGUINEA
Table 1

Key conditions andchallenges
2023

Population, million

1.7

GDP, current US$ billion

12.1

GDP per capita, current US$

7051.5School enrollment, primary (% gross)

a

51.2

a

60.6

Total GHG emissions (mtCO2e)

16.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ WDI for School enrollment (2019); Life expectancy(2021).

Equatorial Guinea’s economy contracted
by an estimated 5.8 percent in 2023,
mainly due to declining oil reserves. The
fiscal and external balances deteriorated
amid declining oil export earnings. The
economy is projected to remain in recession over the medium term. A more-pronounced-than-expected decline in oil production and prices, sustained tighteningof global financial conditions, global tradedisruptions, and a decline in demand
from main export partners represent
downside risks to the outlook.

As a result of declining oil reserves andlower investment, Equatorial Guinea’s oildependent economy has contracted formore than a decade. Between 2013 and2023, the country registered an average
negative 4.2 percent growth per year.
Gross national income (GNI) per capita
has been declining and was at US$ 5,240 in
2022, 58 percent lower than its peak levelin 2008. Structural reforms are needed toprevent the economic decline, by diversifying the growth drivers and building
fiscal stability through domestic revenue
mobilization efforts and more efficientpublic spending.
Reforms have been adopted in recent years
to improve governance and the businessenvironment, including with the passageof an Anti-Corruption law in late 2021, thecompletion of the audits of the largest
state-owned oil and gas companies, andthe signature of a decree establishing atreasury single account. Yet, weaknesses
persist in the governance of extractive revenues and the business environment, preventing the country from attracting investments and creating jobs to achieve sustained and diversified growth.
Actions are also needed to better protect
and include the poor. Despite Equatorial
Guinea’s upper middle-income status, living standards remain low. Life expectancy
at birth is estimated at 60.7 years, compared to 75 years for countries in the same

income group. Around 40 percent ofhouseholds experience at least one day
without electricity per month. Scarcepoverty data remain a challenge to an effective protection of vulnerable groups.
The II National Household Survey report,scheduled to be released in June 2024, will
fill knowledge gaps in poverty and inequality, enabling more evidence-basedsocial protection policies.

Recent developments
After two years of recovery, the Equatoguinean economy fell back into recession
with an estimated real GDP growth rateof -5.8 percent in 2023 (from 3.8 percent
in 2022), driven by the decline in the hydrocarbon sector (-19.3 percent growth in
2023H1 compared to 2022H2). Lower investment contributed to the contraction on
the demand side. The current accountdeficit widened to 1.6 percent of GDP(from 1.0 percent of GDP in 2022) on account of declining export earnings.
Lower oil production and prices led to a 74
percent decline in oil revenues in 2023Q3 (yo-y). The overall fiscal surplus is estimatedto have dropped to 7.3 percent of GDP in
2023 from 13.0 percent in 2022, while thenon-oil fiscal balance in 2023 to 26.4 percent
of GDP, compared to 21.3 percent in 2022.
The debt-to-GDP ratio declined in 2023.
Over the period 2019-23, CFAF 572.2 billion(or 9.5 percent of GDP) out of the CFAF
1,382.5 billion outstanding arrears was paid
to construction companies: as of August
2023, outstanding domestic arrears with

FIGURE 1 Equatorial Guinea / Public finances

FIGURE 2 Equatorial Guinea / Non-income poverty
indicators

Percent of GDP
35

Percent
250

30

200

EqG relative to regional average
EqG relative to MIC average

25
150

20
15

100

10

50

5
0

0

Mortality rate, under-5 Maternal mortality
Mortality rate
(per 1,000 live births)
ratio (modeled
attributed to unsafe
estimate, per 100,000
water, unsafe
live births)
sanitation and lack ofhygiene (per 100,000
population)

-5
-10
2016

2018
Fiscal balance

2020

2022
Revenues

2024f

2026f

Expenditures

Sources: National authorities and World Bank.

Source: World Bank.

MPO

28

Apr 24

construction companies was 7.9 percent of
GDP. High levels of non-performing loans –32 percent of total loans in 2023Q4 – are asource of banking system vulnerability.
The Bank of Central African States(BEAC) continued to tighten its monetary
policy in 2022 and 2023 to contain inflationary pressures and support the exchange rate arrangement. The BEAC policy rate was maintained at five percent
following a cumulative increase by 175
basis points between November 2021 andMarch 2023. Moreover, the BEAC ended
its weekly liquidity injections in March2023 after steadily scaling them backsince June 2021. Inflation is estimated tohave decreased from 4.9 percent in 2022
to 2.4 percent in 2023, including thanks tocontainment measures by the BEAC, theagreement to import food products from
Serbia, and the reduction of some importtariffs. According to the national instituteof statistics, the prices of food products
increased by 7.1 percent between March
2020 and September 2023, which represents an average loss of the purchasing
power of households of 4.5 percent.

OutlookEquatorial Guinea is expected to remain
in recession in 2024 (with growth of –4.3
percent) on the back of declining hydrocarbon production and domestic demand.
Without significant diversification efforts
and progress in structural reforms, declining hydrocarbon production and lower
commodity prices are expected to keep impacting the economy with a negative average growth of 3.5 percent in 2025-2026. Decreasing exports would lead to current account deficits over the medium term. Albeit at a slower pace, imports would also
decrease, on account of declining public
spending due to limited fiscal space. The
fiscal balance is projected to turn to deficits
in 2025-2026, with public expenditure cuts
unable to compensate for the larger decline
in hydrocarbon revenues.
Risks to the outlook are tilted to thedownside. A stronger decline in hydrocarbon production or prices would reduce the fiscal space and risks external

TABLE 2 Equatorial Guinea / Macro poverty outlook indicators

stability. Global trade disruptions affecting food prices amid a protracted war
on Ukraine would increase food insecurity especially for the most vulnerable, as
the country relies heavily on food import.
A further tightening of global financial
conditions and lower demand from China and India, Equatorial Guinea’s main
export partners, could also undermine
growth. The decline in hydrocarbon reserves indicates the need for Equatorial
Guinea to move to a new growth modelby creating the conditions for successful
private sector activities in non-oil sectors
to reinvigorate growth. Ultimately, implementing the economic diversification
vision will require efforts to advancethe governance agenda, facilitate trade,
improve the business environment andpublic financial management. Strengthening the social protection system would
help protect the most vulnerable andreduce inequities, especially as social
spending in Equatorial Guinea was estimated at 1.6 percent of GDP in 2022,
three times lower than the West andCentral Africa average.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
0.3
-0.8
5.2
37.4
0.3
8.5

2022
3.8
9.6
-5.3
-2.0
12.7
19.0

2023e
-5.8
-5.7
7.3
-38.0
-3.7
-1.4

2024f
-4.3
-4.8
20.9
-25.2
-5.9
3.8

2025f
-3.3
2.8
0.3
-11.4
-8.2
-3.3

2026f
-3.6
2.0
-6.2
-9.0
-5.5
-2.8

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

0.4
8.0
-5.9
10.8

3.5
7.5
3.1
3.8

-5.8
-9.1
-39.1
43.1

-4.3
-6.5
-23.1
7.5

-3.3
1.5
-19.6
3.9

-3.6
1.6
-14.8
0.1

Inflation (consumer price index)

-0.1

4.9

2.4

4.0

2.5

2.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-2.1
5.2

-1.0
5.6

-1.6
4.5

-3.6
3.4

-4.2
2.5

-4.1
1.9

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

2.6
15.6
43.4
3.7

13.0
30.1
39.3
14.2

7.3
27.6
36.6
8.7

1.2
20.5
32.6
2.4

-2.4
16.3
32.3
-1.3

-3.7
14.1
34.8
-2.6

GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

22.0
39.0

12.3
44.2

-9.6
41.7

-5.6
40.4

-3.7
39.8

-2.3
39.7

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.

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29

Apr 24

ERITREA

Key conditions andchallenges

Table 1

2023

Population, million

3.7

GDP, current US$ billion

2.7

GDP per capita, current US$

712.3

School enrollment, primary (% gross)

a

72.0

a

66.5

Total GHG emissions (mtCO2e)7.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ WDI for School enrollment (2019); Life expectancy(2021).

Economic growth is projected at 2.8 percent in 2024, supported by the Colluli
potash project construction. Lower global
food prices are expected to help reduce inflation to 5.1 percent in 2024. Downside
risks to the outlook include production
delays at the Colluli mine, global commodity price volatility, geopolitical andregional tensions, and climate vulnerabilities. Poverty is assessed to be widespread,
although national accounts and poverty
statistics have not been produced for morethan a decade.

Eritrea emerged from a decade of international isolation with the lifting of UN sanctions in November 2018. During that period, the government relied on domestic
sources of growth. As a result, the economy is dominated by large state-owned enterprises that crowded out the private sector. Zinc, copper, and gold account forover 90 percent of exports, so metal pricefluctuations are a key source of vulnerability. Monetary policy under a fixed exchange rate regime (pegged to the US dollar) seems ineffective and has been undertaken through administrative measures. Its
effectiveness is further weakened by fiscal
dominance and an underdeveloped financial sector. The absence of a competition
law framework discourages foreign capital
inflows. Competition is severely constrained by state-owned enterprises dominance and government restrictions. Severe
import restrictions limit the demand forforeign currency in the context of low foreign exchange reserves. The country is vulnerable to climate change, with frequent
weather shocks posing a heavy burden on
the economy and rural livelihoods.
The COVID-19 crisis hit Eritrea when
it paused its engagement with international development partners and faced
challenges in accessing external funding.
Informal cross-border trade seemed less affected as the conflict in northern Ethiopia
ended, giving cross-border trade a boost.

The emergency conditions that prevailedin Eritrea over the past decade have led
to severe data production capacity constraints. National accounts data are limited
to unofficial GDP estimates produced by
the Ministry of Finance that the government does not endorse. Inflation estimatescover only the capital city, Asmara, andthe full balance of payment accounts is notproduced. The last population census in
Eritrea took place more than 25 years
ago, and the last official poverty rate forthe country dates from 1996/97, when it
was calculated that 70 percent of urbanhouseholds lived in poverty. Limited
growth and the multiple economic shocks
since then, affecting both urban and rural
households, suggest that this figure may
now be higher.

Recent developments
Real GDP growth is estimated to haveremained relatively stable at 2.6 percent
in 2023, underpinned mainly by the construction of the Colluli potash project.
Meanwhile, inflation moderated to justover 6 percent, largely due to easing
global food and energy prices, providing
some respite for households. Although
global zinc prices fell by 24 percent in
2023, relatively high gold and copper
prices contributed to higher export revenues. Together with lower fuel and foodimports, this helped maintain the current
account surplus above 14 percent of
GDP. Notwithstanding such large surpluses, international reserves are estimated at

FIGURE 1 Eritrea / Evolution of total public debt

FIGURE 2 Eritrea / Primary and overall fiscal balances

Percent of GDP
300

Percent of GDP
0

250

-1
-2

200
-3
150

-4

100

-5

50

-6
-7

0
2020

2021

Domestic debt

2022

2023
External debt

2024f

2025f

2020

2026f

2022

Overall fiscal balance

Total public debt

Sources: Ministry of Finance, Planning, and Economic Development, and WorldBank estimates.
MPO

2021

2023

2024f

2025f

2026f

Primary fiscal balance

Sources: Ministry of Finance, Planning, and Economic Development, and WorldBank estimates.
30

Apr 24

around three months of imports. Strong
mining export revenues have also supported government revenues. Public
debt was estimated at around 219 percent of GDP at end-2023, of which nearly 80 percent is owed to domestic banks.
The country is in debt distress, and asof January 2023, Eritrea was at a pre-decision point in the Highly Indebted Poor
Countries (HIPC) list.
Eritrea has begun to re-engage with development partners and revitalize somebilateral relations. In 2023, the African
Development Bank Board approved
US$49.9 million to build a 30-megawatt
solar photovoltaic power plant in
Dekemhare, and the project is scheduled
to be completed in 2027. The Chinesecompany Sichuan Road and Bridge
Group has acquired a 50 percent stake in
the Colluli project, and the mine is scheduled to start operating in 2026. In addition, Eritrea has rejoined the East African
trade bloc, the Intergovernmental Authority on Development, nearly 17 years after
withdrawing from the body.

OutlookGDP growth is projected to increase to 2.8
percent in 2024, as domestic demand isboosted in the short term by progress inthe construction of the Colluli mine.
Growth is projected to reach 3.3 percent
in 2026 once the mine begins production.
In line with easing global food prices, inflation is expected to decrease further toabout 5 percent in 2024. The current account surplus is expected to widen to over
14 percent of GDP in 2024, helped by robust mining sector performance amid tightimport controls. Gradual fiscal consolidation and sustained strong mining sector receipts should support a narrowing of the
fiscal deficit to 4 percent of GDP in 2024,with fiscal consolidation continuing overthe medium term. The economic recovery
should support a reduction in the public
debt-to-GDP ratio, from 211 percent of
GDP in 2024 to 189 percent of GDP in 2026.
The poverty rate is not expected to decline

TABLE 2 Eritrea / Macro poverty outlook indicators

significantly in the coming years. Significant improvements in the agricultural sector and increased productive employment
in urban areas are critical to addressing thepervasive deprivation in the country.
Significant downside risks include weakerthan-expected global or Chinese demandfor Eritrean commodity exports and related volatility in metals and minerals prices,
production delays at the Colluli mine,
spillovers from the conflict in Sudan, andheightened tensions in the Middle East.
Moreover, severe climate vulnerabilities
could worsen in the coming years, posing
a high risk to food security in Eritrea.
Against this backdrop, Eritrea’s re-engagement with the international community
could help to significantly reduce externalarrears and provide much-needed financing to build essential infrastructure overthe medium term, help abate the risks associated with climate change, and jumpstart the private and financial sectors. Development of the private and financial
sectors could enhance job creation andpromote inclusive growth.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.9
3.0
14.0
39.1
31.0
21.6

2022
2.5
3.6
5.7
13.1
9.2
11.0

2023e
2.6
4.0
3.7
22.7
5.1
5.3

2024f
2.8
4.3
4.1
3.6
3.7
4.1

2025f
3.0
4.1
4.1
12.5
4.1
4.3

2026f
3.3
4.1
4.1
14.9
4.1
4.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.9
4.5
1.4
5.3

2.5
1.6
3.2
1.3

2.6
3.5
2.9
1.5

2.8
3.6
3.3
1.2

3.0
3.2
3.3
2.2

3.3
3.2
3.1
3.8

Inflation (consumer price index)

6.6

7.4

6.4

5.1

5.2

5.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

14.0
1.4

13.0
1.3

14.1
1.2

14.2
1.2

14.2
1.0

15.8
1.0

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-5.8
26.7
241.7
-4.2

-5.6
27.0
239.8
-4.2

-4.8
27.6
219.4
-3.7

-4.0
27.9
210.6
-2.9

-3.8
27.7
193.9
-2.8

-3.4
26.9
188.5
-2.4

GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

1.6
11.7

1.6
11.7

1.4
11.5

1.6
11.7

1.5
11.9

1.5
12.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.

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Apr 24

ESWATINI

Key conditions andchallenges

Table 1

2023

Population, million

1.2

GDP, current US$ billion

4.6

GDP per capita, current US$

3822.9International poverty rate ($2.15)

a

36.1
a

58.0

a

78.1

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

54.6

School enrollment, primary (% gross)

b

120.9

b

57.1

Total GHG emissions (mtCO2e)

3.1Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ Most recent WDI value (2021).

Real GDP is projected to grow by 4.1 percent in 2024, driven by continued increase in public spending financed byhigher Southern African Customs Union(SACU) revenues. Despite easing global
inflationary pressures, annual average inflation increased in 2023 but is projected
to slightly decline to 4.9 percent in 2024.
The budget deficit is projected to continue
declining in 2024, though fiscal policy remains highly procyclical. The poverty rate
is projected to decrease slightly to 52 percent in 2024 using the poverty line for lower
and middle-income countries.

Over the past 20 years, Eswatini’s GDP per
capita growth only averaged 1.8 percent.
The proportion of the population living below the US$3.65/day (2017 PPP) poverty line
fell from 76.4 percent to 58.1 percent between 2000 and 2016, but at 52 percent in
2024 poverty remains high. The country’s
low growth rate can partly be explained bydeteriorating public finances, characterizedby rising public debt, the accumulation ofdomestic expenditure arrears, and public
spending inefficiencies. Concurrently,
structural weaknesses have hindered thedevelopment of the private sector. These include a weak investment climate due tocumbersome
regulations,distortions
caused by inefficient state-owned enterprises, and a limited access to regional and international markets. Adopting a comprehensive strategy that accumulates more physical and human capital, while ensuring more
efficient and inclusive use of these resources, will be critical for Eswatini to meetits development goals. The government isworking on a new growth strategy.
Volatile SACU revenues have shaped themacro-fiscal dynamics. The increase in rigid
spending lines, such as wages and interest
payments in the face of volatile SACU revenue, contributed to rising fiscal deficits,
public debt, and arrears. To make fiscal policy more predictable and countercyclical,
there is an urgent need to consolidate expenditure including implementing the state

owned enterprises (SOEs) reforms and,
improve domestic revenue mobilization.
Poverty and inequality remain high. Over50 percent of the population live below the
US$3.65/day (2017 PPP) lower middle-income country poverty line. High and persistent inequality (54.6 percent in 2016) isalso a risk to social stability.

Recent developments
Real GDP rebounded to an estimated 4.8
percent in 2023 (from 0.5 percent in 2022),
driven by an increase in services and exports. The doubling of SACU receipts allowed the government to reduce the overall fiscal deficit, while increasing spendingthat boosted government-linked services.
Meanwhile, agriculture contracted by 2.5
percent, mainly due to weather-related
challenges that affected production.
Annual average inflation increased from
4.8 percent in 2022 to 5.0 percent in 2023
despite easing global inflationary pressures. The increase was partly the result ofhigher prices for transport and food. These
pressures continued in early 2024, with inflation increasing from 4.3 percent in December 2023 to 4.5 percent in January 2024(yoy). However, inflation remained within
the 3-6 percent band, with the central bankmaintaining the repo rate at 7.5 percent
since July 2023.
The fiscal deficit declined from 5 percent of GDP in 2022 to 2.1 percent in
2023, but expenditure arrears increased
again. Revenue was boosted by the morethan doubling of SACU receipts in 2023.

FIGURE 1 Eswatini / SACU revenues and macroeconomic
variables

FIGURE 2 Eswatini / Actual and projected poverty rates andreal GDP per capita

Percent of GDP
14
12
10
8
6
4
2
0
-2
-4
-6
-8
2018
2019

Poverty rate (%)

Months of imports, percent of GDP
4

3

2

1

0
2020

Current account (lhs)
Fiscal deficit (lhs)

2021

2022

2023e

Real GDP per capita (constant LCU)

100

50000

90

45000

80

40000

70

35000

60

30000

50

25000

40

20000

30

15000

20

10000

10

5000

0

2024f

0
2009 2011 2013 2015 2017 2019 2021 2023 2025

SACU revenue (lhs)International reserves (rhs)

Sources: Eswatini Ministry of Finance and World Bank projections.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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32

Apr 24

Expenditure also increased as a result of ahigher public sector wage bill, interest payments, and election-related expenditures.
While the level of public debt declined between 2022 and 2023, arrears increased
again, due weak commitment controls,
reaching an estimated 2.0 percent of GDP in
February 2024. The government establisheda SACU Revenue Stabilisation Fund in 2023,
but it has not been fully capitalized, as expenditure pressures continued in 2023.
The current account returned to a surplus
in 2023, reflecting higher SACU revenue
and an increasing trade surplus, fueled byhigher exports of key commodities as such
soft drink concentrates, sugar and sugar
products. The level of international reserves remained constant at 2.6 months ofimports in 2023.
While the increase in economic activity has
contributed to higher income, higher transport and food prices disproportionately affect the poor, who spend a larger share of
their resources on these items. High inflation has limited the progress in poverty reduction, with estimated poverty rates only
showing a slight decline from 54 percent in
2022 to 52.8 percent in 2023, using the lowermiddle-income country poverty line.

OutlookThe medium-term economic outlook
looks moderately favorable, with GDP
growth stabilizing at about 3 percent
over 2024-26. Growth is expected to be
driven by higher investments, includingfrom the government (due to higher
SACU revenue), and sustained improvements in industry and services. By contrast, the agricultural sector could be negatively affected by climate change, which
could hurt the poor most. Risks are tilted
to the downside given uncertainty in a
major trading partner (South Africa), especially on energy supply, and international geopolitical tensions. Domestically,
the country remains exposed to socialand political uncertainty. Inflation is projected to slow slightly to 4.9 percent in
2024, following global trends, but elevated crude oil prices, a weaker exchange
rate, and higher food prices could mar
this outlook.
On the fiscal side, SACU revenues areprojected to increase again in 2024, by
11.5 percent relative to FY2023/24. ThisTABLE 2 Eswatini / Macro poverty outlook indicators

increase should contribute to a reductionin the fiscal deficit and the payment ofaccumulated expenditure arrears. However, the magnitude of the adjustment
will also depend on public expenditures,
especially the public sector wage bill and
SOEs reforms. The government should
capitalize on the positive revenue shockby fully operationalize the SACU Revenue Stabilisation Fund while continuing with fiscal consolidation- both expenditure reducing and domestic revenue mobilization measures. Debt isprojected to stabilize in the medium
term, as the fiscal deficit declines. The
current account is expected to remain in
surplus in 2024, on the back of higher
SACU receipts and increased export demand of key products.
Poverty, based on the lower-middle-income country poverty line, is projected to
decline from 52 percent in 2024 to 51.3
percent in 2025. While the projected economic recovery should have a positive
impact on households, such improvement
will be constrained by the lower agricultural production and structural challenges facing the poor including low job
creation and low access to services.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
10.7
5.7
-10.6
11.4
8.8
14.0

2022
0.5
-5.3
-0.3
-10.8
-0.4
3.4

2023e
4.8
4.1
9.7
1.0
8.0
7.0

2024f
4.1
3.2
2.2
9.6
2.6
2.7

2025f
3.3
2.6
0.8
7.0
2.4
2.0

2026f
2.7
2.6
0.8
3.5
2.4
2.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

10.7
4.6
17.9
7.1

0.2
5.1
-0.3
-0.1

4.8
-2.5
1.5
8.2

4.1
-1.2
4.0
4.9

3.3
1.9
3.0
3.7

2.7
2.5
2.0
3.2

Inflation (consumer price index)

3.7

4.8

5.0

4.9

5.2

5.3

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

2.6
1.2

-2.4
0.7

4.0
0.8

2.3
0.8

0.6
0.7

-1.5
0.7

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.6
25.1
37.9
-2.7

-5.0
23.9
41.8
-2.7

-2.1
29.4
38.9
-0.2

-2.0
27.7
35.4
-0.3

-2.7
26.3
33.5
-1.2

-1.3
24.5
31.2
0.1

30.9
53.7
76.1

31.0
54.0
76.2

29.6
52.8
75.1

28.5
52.1
74.7

27.5
51.4
74.2

26.9
50.7
73.7

5.8
48.2

0.4
47.9

0.7
47.5

2.8
48.0

4.0
49.1

4.1
50.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2016-HIES. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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ETHIOPIA

Key conditions andchallenges

Table 1

2023

Population, million

126.5

GDP, current US$ billion

171.3

GDP per capita, current US$

1353.5International poverty rate ($2.15)

a

27.0
a

65.0

a

90.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.0

School enrollment, primary (% gross)

b

85.5

b

65.0

Total GHG emissions (mtCO2e)216.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Growth surged from 6.4 percent in FY22
to 7.2 percent in FY23, supported bygood harvests and steady service sector
growth. However, growth remains lower
than before COVID-19, and compoundedshocks since 2019 made it more difficult
to translate economic growth into poverty
reduction. Reflecting slow reform implementation, growth is expected to drop to
7 percent in FY24 and over the medium
term. Urgent reforms implementation is
critical to restore macroeconomic stability
and create enabling environment forstructural transformation.

Ethiopia’s state-led and public-investment-intensive development model supported growth rates of nearly 10 percent
between 2004 and 2018, among the world’s
highest, and drove significant gains inpoverty reduction. Despite these achievements, the country’s development modelyielded negligible improvements in structural transformation and productivity
growth while contributing to macroeconomic imbalances: debt vulnerabilities, fiscal constraints, depleted liquidity buffers,
and foreign-exchange shortages. The 2019
Home-Grown Economic Reform Agendasought to prioritize reforms that would address macroeconomic distortions, unlock
greater private sector participation andmarket orientation. However, implementation was slowed amid multiple
shocks—including the COVID-19 pandemic, major conflict in the north, andsoaring
globalfood
andenergyprices—that exacerbated macroeconomic
vulnerabilities. This has slowed growth toabout 6 percent since FY20.
In recent months, the government hasannounced a revival of the 2019 HGER
to target macro-financial measures to stabilize the macroeconomy and reduce
macroeconomic vulnerabilities; introduce
structural reforms to alleviate businessconstraints to create an enabling environment for private sector investment; andimplement sectoral policies to address

sector-specific institutional and market
failures and enhance productivity.
The combination of climatic shocks, disease outbreaks, armed conflict, and economic shocks have made difficult to continue reducing poverty at the pace observed before 2019. Poverty rates are estimated to have stagnated at around the level observed in 2016. Food insecurity has also worsened, due to global food and energy price shocks and the disruptions tograin supply due to the war in Ukraine.

Recent developments
Growth picked up to 7.2 percent in
FY23 (ending June 2023) from 6.4 percent in FY22 as good harvests supported
agricultural sector growth despite protracted drought in pastoral areas. Service sector dynamism also contributed
to growth, while the manufacturing andconstruction sectors were negatively affected by worsening foreign exchange
shortages, restrictions on non-essential imports, and the suspension of preferential
US market access.
The current account deficit narrowed to 2.8
percent of GDP in FY23 from 4 percent of
GDP in FY22, due to strong service exports
and lower imports related to foreign exchange shortages. It was largely financed
through foreign direct investment and thedrawdown of foreign exchange reserves. A
two-year debt suspension agreement with
the G20 Official Creditors’ Committee in
November 2023 helped ease external financing pressures, but its continuity is

FIGURE 1 Ethiopia / Gross foreign exchange reserves

FIGURE 2 Ethiopia / Actual and projected poverty rates andreal private consumption per capita

Million US$
4,500

Poverty rate (%)

Months of imports
3.0Real private consumption per capita (constant LCU)

100

14000

90

4,000

2.5

3,500
3,000

2.0

2,500

1,500

70

10000

60

8000

50

1.5

2,000

12000

80

1.0

40

6000

30

4000

20

1,000

0.5

500
0
Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23
In million US$ (lhs)

2000

10
0

0.0

0
2010 2012 2014 2016 2018 2020 2022 2024 2026

In months of imports (rhs)

Source: National Bank of Ethiopia.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

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34

Apr 24

contingent on reaching agreement with theInternational Monetary Fund on an economic reform program.
Fiscal space narrowed further amid declining revenues and donor flows. Ethiopia’s
tax revenues (with a tax-to-GDP ratio of
6.8 percent in FY23) are insufficient to fundessential spending and growth-enhancing
investments and anchor fiscal sustainability. To contain fiscal deficits, public spending has been steadily cut, falling to 10.8
percent of GDP in FY23 (less than half thelevels in the early 2000s). With limited financing options, the deficit narrowed
from 4.2 percent of GDP in FY22 to 2.5
percent of GDP in FY23, and was financed mainly through domestic borrowing, including from the central bank. The
public debt-to-GDP ratio continued to decrease in FY23 as external disbursements
remained constrained.
Inflation remains high, reaching 28.7
percent in December 2023, with large
contributions from non-food inflation
due to the phasing out of fuel subsidies,monetary financing of the deficit, andwidening premiums in parallel currency
markets (that reached over 100 percent
in recent months). Overlapping crises–persistent droughts and a surge in global

food, fuel, and fertilizer prices– have also
contributed to inflation.
Against this backdrop, poverty is expected
to have remained stagnant, which combined with high population growth has led
to a ceaseless increase in the already large
number of poor people in the country—by2023, 31.5 million people lived below the$2.15/day poverty line.

Outlook
Growth is projected to drop to about 7 percent over the medium term amid slow
progress in reform implementation. Although still a high level of growth, the continuance of policy distortions, including asignificantly overvalued exchange rate, constrains Ethiopia from translating thisgrowth into tangible improvements in productivity and job opportunities for people.
Although fiscal and current account deficits
narrow over the medium term, Ethiopia willremain severely constrained by a shortage ofdomestic and external financing. Inflation is
projected to decline gradually, as monetary financing declines in line with narrowing fiscal deficits. The implementation

TABLE 2 Ethiopia / Macro poverty outlook indicatorsof critical macroeconomic and structuralreforms under discussion would help address macroeconomic distortions and improve the quality of growth.
A shift in Ethiopia’s economic model towards a private sector led and more market oriented one is urgently needed to address mounting macroeconomic vulnerabilities, restart a stalled structural transformation and create jobs. Addressing the significant distortions in the foreign exchange
market is critical to restore productivityled growth, improve resource allocation,
and alleviate external payment risks. Debt
treatment and the resumption of official
external flows will also be crucial to ease
external financing pressures. However,any intensification in conflicts would complicate reform implementation and affectforeign exchange inflows.
Substantial poverty reduction in the medium term would require strong performancein the agricultural sector, which employs
over 70 percent of the labor force, as well as
dynamism in other sectors. Additional
shocks could push millions more intopoverty and increase further spatial inequalities and mitigating this risk requires,among other things, an acceleration of reforms to rebuild fiscal and social buffers.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2020/21
6.3
3.0
12.2
7.6
5.5
2.0

2021/22
6.4
4.5
1.5
11.0
11.7
10.8

2022/23e
7.2
6.1
-16.0
11.2
-0.8
-4.1

2023/24f
7.0
6.1
0.6
10.7
6.5
11.2

2024/25f
7.0
6.1
4.8
6.3
6.1
1.2

2025/26f
7.0
6.1
5.0
6.4
6.1
1.2

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.3
5.5
7.3
6.3

6.4
6.0
4.8
7.9

7.2
6.3
6.9
8.0

7.0
6.0
7.0
7.9

7.0
6.0
7.0
7.7

7.0
5.9
7.1
7.7

Inflation (consumer price index)
Current account balance (% of GDP)

20.2
-2.7

33.7
-4.0

32.6
-2.8

28.5
-2.4

23.2
-1.7

17.6
-1.3

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.8
11.2
56.6
-2.2

-4.2
8.3
54.4
-3.6

-2.5
8.2
42.7
-1.9

-2.0
7.5
36.1
-1.5

-1.8
7.0
31.8
-1.4

-1.8
6.8
29.8
-1.5

25.6
62.7
89.7

25.4
62.2
89.5

24.9
61.4
89.1

24.4
60.6
88.6

24.0
59.8
88.2

23.5
59.0
87.8

3.5
14.5

2.3
14.0

2.5
13.5

2.6
13.0

2.5
12.4

2.7
11.9

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast. Growth projections reflect limited available information, and are subject to revision as better data becomes available.
a/ Calculations based on 2010-HICES and 2015-HICES. Actual data: 2015. Nowcast: 2016-2023. Forecasts are from 2024 to 2026.
b/ Projection using annualized elasticity (2010-2015) with pass-through = 0.7 based on private consumption per capita in constant LCU.

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GABONKey conditions andchallenges

Table 1

2023

Population, million

2.4

GDP, current US$ billion

20.5

GDP per capita, current US$

8414.1

International poverty rate ($2.15)

a

2.5
a

8.1

a

31.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

38.0

School enrollment, primary (% gross)

b

100.6

b

65.8

Total GHG emissions (mtCO2e)22.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2017 PPPs.
b/ Most recent WDI value (2021).

Gabon’s economy grew by 2.3 percent in
2023 on the back of sustained oil production, down from 3.0 percent in 2022. Following a coup d’état in August 2023,
an orderly return to an elected government over the planned two-year transition period will be key to avoid risks ofsanctions and adverse impacts on investment and growth. Substantial reforms are needed to boost growth, reduce poverty, restore fiscal stability, andstrengthen governance.

Despite Gabon’s rich natural endowments,
over recent decades low and erratic
growth and insufficient diversification resulted in high unemployment and persistent poverty. Popular discontent aroundgovernance weaknesses and electoral
fraud allegations fueled support for theAugust 2023 coup d’état. A transitional
government was rapidly set up with a twoyear plan for return to elected government.
After six months of sanctions, Gabon was
reintegrated in the Economic Communityof Central African State on March 9, 2024.
Public expectations for the transition are
high, putting pressure on social spending
and delivery of quick results. The authorities increased civil service hirings, extended fuel subsidies to the electricity utility(SEEG), and reinstated scholarships forsecondary education. These decisions havea fiscal cost in a context of constrained financing capacity. While domestic revenue
mobilization efforts are underway, reliance on volatile oil revenues and tight financing conditions pose risks to the budget. Calibrating spending pressuresagainst realistic revenue mobilization
goals will be key for fiscal sustainability.
The transition could provide an opportunity for renewed reform momentum andimproved institutional controls of publicresources, as well as governance of publicfinances. Promoting access to credit, entrepreneurship, and strengthening social

support to the most vulnerable would
also be crucial for higher and inclusive
growth. A new development plan withthese goals is being prepared. It brings
forward an ambitious program targeting
key areas such as roads, energy, health,and education. However, investments
will need to be prioritized to ensure
its feasibility and fiscal sustainability. A
more detailed focus on jobs is key for inclusive growth and lower wage bill pressures. A successful implementation will
also rely on strong coordination and improved public investment management.

Recent developments
Gabon’s economy grew by an estimated
2.3 percent in 2023, down from 3.0 percent
in 2022. The lower growth was caused byweaker wood and manganese production,amid high fuel costs and railway disruptions caused by landslides. Oil production
grew by 3.7 percent, fueled by new oilfields, low OPEC+ restrictions and global
demand. Demand-side growth was driven
by public investments, oil and agricultural
exports, and oil investments.
Gabon’s investments in optimizing oilfields and expanding mines and wood
production led to large trade surpluses,
offsetting its strong reliance on food imports. In 2023, although oil, palm oil, andrubber export volumes increased, lower
oil prices, appreciated USD and lower
wood and mining production decreased
exports. Imports remained stable, andthe current account surplus remained

FIGURE 1 Gabon / Growth of real GDP, Real oil GDP andreal non-oil GDP

FIGURE 2 Gabon / Actual and projected poverty rates andreal GDP per capita

Percent change
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
2017 2018 2019 2020 2021 2022 2023e 2024f 2025f 2026f

Poverty rate (%)

Oil GDP

Non-Oil GDP

Real GDP per capita (constant million LCU)

40

2.6

35

2.6
2.5

30

2.5

25

2.5

20

2.5

15

2.5
2.4

10

2.4

5

2.4

0

2.4
2017

Real GDP

Sources: Official government data and World Bank calculations.

2019

2021

36

Apr 242025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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2023

high but decreased to estimated 28.7 percent of GDP in 2023.
The fiscal deficit increased slightly in
2023 to an estimated 1.0 percent of GDP.
Government revenues benefited fromhigher non-oil receipts and tax expenditure cuts. Public spending increased due
to elections, public works, and the settlement of domestic arrears in late 2023.
Lower oil prices and the removal of fuel subsidies for industrial consumers mitigated the fiscal cost of fuel subsidies.
While efforts are ongoing to avoid theaccumulation of arrears, external arrears
at end-2023 were estimated at CFAF 123
billion (1.0 percent of GDP). Public debt
stood at 70.5 percent of GDP (57.4 percent of domestic and external debt, plus
arrears and T-bills).
The Bank of Central African States maintained a tight monetary policy, with policy
rate kept at 5.0 percent after a 175-basis
point increase between late 2021 andMarch 2023. Yet, credit to the private sector
increased by 14.2 percent in September
2023 (y-o-y), driven by oil and public
works. Inflation decreased from 5.2 percent (y-o-y) in January 2023 to 2.7 percent in October, but food inflation was
at 4.7 percent. While exemptions andprice controls on essential food items
were expanded to alleviate living costs,

households remain affected. Combinedwith static per capita growth, this increased poverty to 35.2 percent in 2023.

OutlookGabon’s recovery should continue, withhigher risks due to recent political developments. An average 2.7 percent
growth is projected in 2024-2026, mainly
coming from non-oil sectors, including
new iron and manganese deposits, timber production, and new oil palm,
biodiesel, and gas industries. Maturingoilfields would gradually reduce oil output from 2025, but exploration projects
could reverse this scenario.
Higher imports in real terms are expected,
driven by infrastructure projects and private investments. With oil exports declining from 2025, the authorities are promoting investments to boost exports of othercommodities, notably manganese, iron,and timber. Current account surpluses
would remain high, supported by highcommodity exports.
Diminishing oil production and prices
would impact fiscal revenues. Also,
higher wage bills, large infrastructure
projects, and social support measures

TABLE 2 Gabon / Macro poverty outlook indicators

would exacerbate spending pressures,
resulting in fiscal deficits (averaging 4.9
percent of GDP in 2024-26, with non-oil
primary deficits of 12.0 percent of nonoil GDP). Primary balances would turnnegative, increasing debt. Without significant fiscal adjustment, these pressures could make the fiscal and debt
situation unsustainable.
Inflation would remain below the 3.0 percent regional convergence criteria. However, the poverty rate should increase to
36.9 percent by 2026. Most jobs are in services, which is expected to have insufficient growth. Also, growth is largely driven by capital-intensive extractive industries, which do not create sufficient jobs
and equitable income distribution.
Downside risks include commodity priceshocks, competition from Russian oil in
Asian markets, tighter financing conditions, and impacts of intensifying war in
Ukraine or conflict in the Middle East.
Uncontrolled spending from higher socialpressures or SOE acquisitions could leadto spiraling deficits and debt. While ECCAS’ sanctions were lifted, a delayedtransition could trigger sanctions, hitting
access to regional markets. The political
agenda could limit reforms needed forbetter governance, higher, job-based
growth, and poverty reduction.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.5
-1.4
3.2
9.2
-2.0
3.5

2022
3.0
-0.3
3.8
8.3
6.9
8.3

2023e
2.3
3.2
-1.5
-0.5
1.4
-0.9

2024f
3.0
5.6
-4.9
2.4
5.5
4.1

2025f
2.3
2.3
1.8
3.8
5.3
5.7

2026f
2.8
4.7
-4.8
2.4
4.2
3.2

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.9
11.2
3.2
1.4

3.3
9.4
3.2
2.4

2.3
2.1
3.5
1.5

3.0
3.6
2.2
3.3

2.3
5.5
0.0
3.1

2.8
6.6
4.2
1.1

Inflation (consumer price index)

1.1

4.3

3.7

2.4

2.3

2.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

30.1
2.1

35.2
4.6

28.7
5.5

29.2
5.4

28.8
5.0

28.4
5.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-1.8
14.7
65.8
0.9

-0.8
20.4
55.3
1.7

-1.0
22.9
70.5
1.9

-3.8
20.0
73.7
-0.7

-5.9
18.8
79.1
-2.8

-5.0
18.1
81.8
-1.7

2.3
8.2
32.1

2.4
8.5
32.3

2.9
10.0
35.2

3.1
10.1
35.1

3.2
10.7
36.1

3.2
10.9
36.9

4.5
15.9

2.5
16.0

-0.7
14.9

-0.2
13.8

0.1
12.8

0.8
12.1

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2017-EGEP. Actual data: 2017. Nowcast: 2018-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.
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THE GAMBIA
Table 1

Key conditions andchallenges
2023

Population, million

2.8GDP, current US$ billion

2.3

GDP per capita, current US$

845.8

International poverty rate ($2.15)

a

17.2
a

47.0

a

80.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

38.8

School enrollment, primary (% gross)

b

92.3

b

62.1

Total GHG emissions (mtCO2e)

3.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2020), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Economic growth accelerated to 5.3 percent in 2023 as favorable rainfall led to agood harvest while investment supported
growth in the industry sector. Inflation
averaged 16.9 percent, eroding the purchasing power of households and increasing poverty. The fiscal deficit halved to
2.6 percent of GDP, driven by strong tax
collection and higher grants. High inflation, debt vulnerabilities, foreign exchange pressures, and regional and global
geopolitical tensions cloud the outlook.

The Gambia is consolidating its democratic transition and implementing reforms
to transform the economy. However,structural factors continue to hamper
growth, including low productivity
growth, lack of structural change, constrained fiscal space for infrastructure investments, a constraining business environment for private sector development,
limited economic diversification, and human capital challenges. This has resulted
in limited job creation and economic opportunities, limited access to essential
public services, and high poverty.
Real GDP growth averaged 3.1 percent in
1990–2022—less than 0.5 percent in percapita terms. The labor market faces a
low labor force participation rate (43.6
percent), significant underutilization (41.5
percent), predominance of informal (62.8
percent) and unwaged employment (72percent), and more significant gender
gaps. Poverty rates are higher, with anestimated 17.2 percent of the population
living in poverty in 2020, using the international poverty line of $2.15 (in 2017
PPPs). Social disparities prevail in accessto essential services, and most of thecountry still needs better connections toroads, schools, and health facilities.
These weaknesses are coupled withdownside risks such as reemerging foreign exchange pressures, high dependence on imports of essential goods andservices, putting persistent pressure on
the balance of payments and forex market and exacerbating the vulnerability
to global shocks in commodity markets.
Fiscal risks remain substantial given
State-Owned Enterprises (SOEs) contingent liabilities and the high dependence
on external grant financing due to low
tax collection. High domestic debt also
crowds out private credit.
Against this backdrop, the Government is
implementing the National Development
Plan (NDP) 2023-2027 to consolidate democratic governance, accelerate growth,and build resilience to shocks. Implementing this agenda poses significant financing
needs, with US$0.7 billion of available
funding as of December 2023 out of total
cost estimated at US$3.5 billion.

Recent developments
Economic growth accelerated to 5.3 percent in 2023 (2.7 percent per capita), mainly driven by agriculture and industry.
Agriculture benefited from favorable rainfall and increased fertilizer subsidies. Despite increased tourism activity, services
decelerated as many subsectors contracted(information and communication, entertainment, etc.). Private investment, supported by remittances and public investment, drove growth on the demand side.
Inflation averaged 16.9 percent in 2023 –the highest level in decades – caused byimported food inflation, utility tariffs increases, and currency depreciation, dragging down private consumption.

FIGURE 1 The Gambia / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 The Gambia / Actual and projected poverty rates
and real GDP per capita

Percent, percentage points
8

Poverty rate (%)

Real GDP per capita (constant LCU)

100

30000

90

6

25000

80
70

4

20000

60

2

50

15000

40

0

10000

30
20

-2

5000

10

-4
2019

2020

Agriculture
Net taxes

2021

2022

2023

2024

Industry
Real GDP growth

2025

0

2026

0
2010 2012 2014 2016 2018 2020 2022 2024 2026

Services

Sources: The Gambian authorities and World Bank estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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38

Apr 24

Rising food prices are expected to haveincreased poverty to 16.9 percent in 2023,
from 16.4 percent in 2022 - an increase ofover 25,000 people, using the international poverty line of $2.15 (in 2017 PPPs).
The increase in poverty is mainly due
to food price inflation which rose to 22
percent in 2023, eroding the purchasing
power of households.
The fiscal deficit halved to 2.6 percent of
GDP in 2023, driven by increased tax revenues and grants. Public expenditure remained high owing to increased spendingon road infrastructure. With lower net domestic borrowing, public debt declined to75.8 percent of GDP in 2023. Nevertheless,the Gambia remains at high risk of debt
distress. The current account deficit (CAD)
is estimated at 4.5 percent of GDP in 2023, almost comparable to the 4.2 percent in 2022,
on the back of a recovery in tourism and increased imports related to ongoing infrastructure projects. The monetary stance wasfurther tightened, with the policy rate increasing to 17 percent in August 2023 from
10 percent in April 2022. However, the effectof monetary tightening seems limited, as
inflation is essentially imported. Due toimport pressures, international reserves

declined to 4.2 months of imports in 2023
from 5.1 months in 2022, alongside a depreciation of the nominal exchange rateof 4.6 percent.

Outlook
Growth is projected to average 5.6 percent
in 2024-26 (3.1 percent per capita), driven
by increased activity in all sectors. Agriculture and services are expected to sustain
growth, assuming favorable rainfall andcontinued recovery in tourism. Robust remittances, which represented 32.1 percent
of GDP in 2023, will support the recovery
in private sector demand, which, together
with infrastructure programs, are expected to drive growth. Inflationary pressures
are predicted to persist in 2024 and gradually ease, with CPI inflation reaching
6.5 percent in 2026, close to the Central
Bank’s 5 percent target, reflecting the
restrictive monetary policy and easing
global supply conditions.
Agriculture growth, recovery of the
tourism sector, and robust remittances are
expected to positively affect household

TABLE 2 The Gambia / Macro poverty outlook indicators

well-being. However, sustained increases
in food prices will continue to undermine
such gains in 2024, given poor households
spend 65 percent on food. Consequently,
the international extreme poverty rate is
expected to increase to 17.2 percent in 2024
before declining in 2025 and 2026.
The CAD is expected to remain contained,
averaging 3.8 percent in 2024-26, reflecting
robust remittances, a decrease in investment-related imports, and strong export
growth. The monetary policy is set to remain tight as inflation persists. The fiscal
deficit is projected to narrow to 1.5 percent
of GDP over 2024-26, supported by thecompletion of major infrastructure projects
and domestic revenue mobilization efforts,
including the digitization of tax administration and customs, the implementationof digital excise stamps for excisable products, the introduction of fuel marking, andreforms to broaden the tax base. Public
debt is projected to decrease to 68.9 percent of GDP in 2024, supported by the fiscal path. Nevertheless, The Gambia is expected to remain at high risk of debt distress, and the end of the debt-service deferrals in 2024 could weigh on debt sustainability and economic growth.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.3
7.2
-7.9
-8.7
-27.2
-15.2

2022
4.9
3.4
2.3
15.1
8.5
16.2

2023e
5.3
3.3
2.4
13.7
18.9
11.0

2024f
5.5
3.7
2.5
14.1
18.0
12.0

2025f
5.8
4.1
2.6
11.8
20.1
11.0

2026f
5.4
4.1
2.7
9.1
22.0
10.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.3
13.7
2.9
2.8

4.9
3.6
3.1
6.0

5.3
7.2
6.5
4.1

5.5
6.6
6.4
4.8

5.8
6.2
6.1
5.6

5.4
5.1
6.1
5.4

Inflation (consumer price index)
Current account balance (% of GDP)

7.4
-4.3

11.5
-4.2

16.9
-4.5

15.9
-5.1

10.5
-3.2

6.5
-2.3

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.8
16.8
83.9
-1.8

-5.0
17.7
83.4
-2.9

-2.6
20.6
75.8
-0.4

-2.1
21.8
68.9
1.0

-1.3
20.4
64.6
1.4

-1.0
20.2
59.5
1.5

16.1
45.4
80.3

16.4
45.9
81.5

16.9
47.0
82.3

17.2
47.6
83.2

16.5
46.7
82.9

15.9
45.8
81.8

4.2
20.7

3.4
21.0

2.9
21.4

2.5
21.7

2.5
22.0

2.5
22.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2020-IHS. Actual data: 2020. Nowcast: 2021-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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39

Apr 24

GHANAKey conditions andchallenges

Table 1

2023

Population, million

34.1

GDP, current US$ billion

76.2

GDP per capita, current US$

2234.2

International poverty rate ($2.15)

a

25.2
a

48.8

a

78.5

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

43.5

School enrollment, primary (% gross)

b

97.9

b

63.8

Total GHG emissions (mtCO2e)

18.3

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ Most recent WDI value (2021).

Ghana’s economic conditions improved in
2023 but challenges remain, notably elevated inflation, subdued growth, and substantial pressure on public finances anddebt sustainability. These lingering challenges will continue to subdue growth in
2024 at 2.9 percent but, in the medium
term, growth will rebound to its longterm potential as prevailing conditions
stabilize. Accordingly, lower growth projections coupled with recent bouts of highinflation mean that poverty in 2024 will
be at its highest level in over a decade.

Ghana is in debt distress and public debt
is unsustainable. In response, the Government has embarked on a comprehensive
debt restructuring, a significant fiscal consolidation program, and the implementation of reforms to foster economic stability
and resilience. The authorities’ stabilization efforts are being supported by an
Extended Credit Facility (ECF) programof the International Monetary Fund (IMF)
for approximately US$3 billion. The program aims to attain a moderate risk ofdebt distress over the medium term andreplenish the foreign exchange reservesof the Bank of Ghana (BoG) to cover
three months' worth of imports by theconclusion of the program.
The crisis has taken a toll on the pace of economic growth – which decelerated to an estimated 2.9 percent in 2023 and is projected
to remain weak in 2024. Returning growth toits potential rate of 5 percent will require
macroeconomic stability. Over the longer
term, structural reforms aimed at promoting private sector development and increasing FDI attractiveness are necessary to raise
the country’s growth potential. Critical reforms include strengthening the insolvency
regime, access to finance, the energy sector,
and the legal and regulatory environment
faced by foreign direct investors. Accelerating digitalization and harnessing the opportunities offered by the Africa Continental
Free Trade Agreement (ACFTA) throughintegration with global value chains will
also be important in this regard. These willneed to be complemented with measures
to expand well-targeted social protection
programs to mitigate the impact of the crisis and fiscal consolidation on the poor andmost vulnerable.

Recent developments
In 2023, economic growth slowed down toan estimated 2.9 percent, albeit surpassing
initial projections for the year. This growth
was primarily driven by robust expansions
in the agriculture and services sectors
while industrial production fell by 1.2 percent due to contractions oil, electricity, andconstruction sub-sectors; and subdued
growth in gold and manufacturing.
Fiscal consolidation is broadly on trackwith estimated deficit of 4.7 percent ofGDP, significantly lower than the 11 percent deficit in 2022. At 15.7 percent of GDP
in 2023, revenues and grants reached thesame level as 2022 despite lower oil revenues. The government implemented measures to contain wage bill increase, reduced Capex and spending on goods andservices leading to a reduction in expenditures from 26.6 percent of GDP in 2022
to an estimated 20.4 percent in 2023. Decreased in interest payments also helped
contain expenditures. The key financial
soundness indicators demonstrate overall
stability but credit to the private sector has
contracted reflecting increased risk aversion among banks, as non-performing
loans ratio increased above 20 percent.

FIGURE 1 Ghana / Real GDP growth and contributions toreal GDP growth

FIGURE 2 Ghana / Actual and projected poverty rates andreal GDP per capita

Percent, percentage points
25

Poverty rate (%)

20

80

15

70

Real GDP per capita (constant LCU)

90

10

7000
6000
5000

60

5
0
-5

50

4000

40

3000

-10

30

-15

20

-20

10

2021

2022

Gov. cons.
Inventories
Statistical disc.

2023

2024

Exports
Private cons.
GDP

2025

2026

2000
1000

0

GFCF
Imports0
2012

Sources: Statistical service and World Bank.

2014

2016

2018

2020

40

Apr 242024

2026

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2022

Inflation has declined significantly but remains well above the Bank of Ghana(BoG) target range of 8±2 percent. Yearon-year inflation fell from 53.4 percent inJanuary 2023 to 23.2 percent in December 2023, reflecting more stable exchange
rates and the effects of monetary policy tightening in 2022-23. Over the firstmonths of 2024, the deceleration of inflation has stalled due to pass-through ofthe depreciation on prices of imported
goods, on non-food inflation while foodinflation marginally fell.
In 2023, the (pre-external debt restructuring) current account balance improved
to an estimated deficit of 1.7 percent ofGDP, from the 2022 deficit of 2.3 percent,as a decline in oil exports was more-thanoffset by import compression, strong remittances, and lower income repatriation
by mining and oil companies. The capital
account continues to be in deficit due to
weak FDI inflows and continued net outflows of portfolio investments. Thus, BOP
remained in high deficit, at 3.2 percent
of GDP. Gross international reserves was
equivalent to 1.1 months of imports at theend of 2023, an increase from 0.7 months ofimports in December 2022.

The immediate implications of the macroeconomic crises and debt distress in the
country are the worsening in poverty andliving standards of the population. The“international poverty” rate is estimatedat 30.3 percent in 2023, a worsening of
3.5 percentage points since 2022.

Outlook
Growth is expected to remain weak in 2024
at 2.9 percent as the ongoing fiscal consolidation, high inflation rates, elevated interest rates, and lingering macroeconomic
uncertainties are all projected to dampen
private consumption and investment, limiting non-extractive sector growth. However, growth will gradually rebound to its
long-term potential of approximately 5
percent by 2026 as prevailing conditions
stabilize. The external sector is forecast to
significantly improve over the medium
term due to enhanced net capital inflows
and continued trade surpluses.
In 2024, fiscal consolidation is expected to
be on track due to continued revenue andexpenditure reforms; and the external debt

TABLE 2 Ghana / Macro poverty outlook indicators

restructuring. By 2026, the authorities expect to generate a primary surplus of 1.4
percent of GDP, a fiscal adjustment almost
4 percentage points of GDP between 2023
to 2026.
Ghana’s outlook is subject to significant
downside risks as baseline projections depend on the completion of the authorities’
comprehensive debt restructuring and successful reform implementation, including
meeting projected revenue mobilization
targets. Further, there is significant risks tofinancial sector stability, due to the DDE
while exchange rate, credit, and liquidity
risks further add to the vulnerabilities.
Possible policy slippages due to the approaching end-2024 general elections represent additional domestic vulnerabilities.
Overall, the combination of economic challenges, fiscal consolidation measures, anddownside risks suggests a challenging environment for poverty reduction efforts in
Ghana. Adjustments to the country’s main
cash transfer program, Livelihoods Empowerment Against Poverty, are expected
to help the poorest of the poor yet more isneeded. Poverty is expected to change little between 2024 and 2025 and is expected
to come down slowly by 2026.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.1
0.8
82.1
4.5
69.1
113.8

2022
3.8
4.8
-31.7
28.6
9.6
13.8

2023e
2.9
4.6
-8.0
3.9
5.8
6.3

2024f
2.9
4.9
1.9
-2.7
10.3
8.3

2025f
4.4
5.0
-0.6
9.3
6.4
9.2

2026f
4.9
5.7
-2.2
9.9
7.2
10.1

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.4
8.5
-0.5
9.4

3.7
4.2
0.6
6.2

2.9
4.5
-1.2
5.5

2.9
3.2
3.8
2.0

4.4
5.4
4.1
4.1

4.9
3.9
5.8
4.8

Inflation (consumer price index)

10.0

31.5

40.3

23.2

11.5

8.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-3.7
2.0

-2.3
2.0

-1.7
1.5

-1.9
2.7

-2.2
3.3

-2.4
3.4

-11.4
15.3
76.7
-4.1

-11.0
15.6
88.7
-3.6

-4.7
15.7
86.1
-0.5

-5.0
16.7
83.6
0.6

-4.0
17.3
80.9
1.6

-3.5
18.2
77.9
1.4

24.8
47.0
76.7

26.8
50.2
78.9

30.3
55.3
82.8

32.9
58.7
84.6

33.2
59.4
84.8

32.2
57.5
83.9

6.0
129.8

11.8
121.2

7.3
117.0

4.8
114.3

5.9
110.9

7.1
106.8

Fiscal balance (% of GDP)
Revenues (% of GDP)aa,bDebt (% of GDP)a
Primary balance (% of GDP)c,dInternational poverty rate ($2.15 in 2017 PPP)c,dLower middle-income poverty rate ($3.65 in 2017 PPP)c,dUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Fiscal and debt forecasts do not factor in the impact of the ongoing Debt Restructuring (DR) as the process is yet to conclude.
b/ Starting from 2022, public debt numbers include, in addition to central government debt, explicitly guaranteed (and certain implicitly guaranteed) SOE debt, cocobills issued
by Cocobod, and reconciled domestic arrears to suppliers.
c/ Calculations based on 2016-GLSS-VII. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
d/ Projections using microsimulation methodology.

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41

Apr 24

GUINEA

Key conditions andchallenges

Table 1

2023

Population, million

14.2

GDP, current US$ billion

23.0

GDP per capita, current US$

1617.5International poverty rate ($2.15)

a

13.8
a

46.6

a

86.8

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

29.6

School enrollment, primary (% gross)

b

98.0

b

58.9

Total GHG emissions (mtCO2e)45.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

Mining investment will boost growth to
7.1 percent in 2023, poverty will decline
slightly, and the fiscal deficit widen to 1.6
percent as capital spending rises. Growthin 2024 will slow primarily due to a dip
in mining and slight impacts of the December 2023 fuel depot explosion. Extreme poverty is projected to fall in 2024
as food prices ease. Risks include delays tothe political transition and reforms.

Growth was robust over 2019-23, averaging 5.4 percent (2.9 percent per capita
terms) driven by the mining sector andagriculture productivity growth, supporting low fiscal deficits to GDP (averaging
1.7 percent). However, weak mining linkages to non-mining sectors, headwinds
from Dutch-disease (DD) dynamics, andrecent external shocks from the COVID-19
pandemic and Russia’s invasion of
Ukraine limited job creation and poverty
reduction. The $2.15 international poverty
rate was 10.6 percent on average over thesame period, only marginally affected by
the mining-driven growth. The Simandou
mining operation, expected to almost
triple Guinea’s GDP in the medium term,holds potential to transform Guinea’s
economy and create jobs if reforms are implemented that counter DD.
However, the ongoing mining boom, andassociated real appreciation of the local
currency, adversely affects competitiveness of non-mining sectors and hampers
efforts to diversify the economy to create
more and better jobs. Structural challenges include low human capital levels,
large infrastructure gaps, an underdeveloped financial sector, weak institutional
capacity, and large gender gaps in education, earnings, agriculture productivity, and political representation. Weak fiscal revenue mobilization constrains public investment. Recent increases in digital

FIGURE 1 Guinea / Debt, fiscal deficit, and inflation

Percent of GDP
45

access and e-government transactions havehelped bolster economic activity and streamlined tax collection; yet further digitalization and structural reforms are needed tospur diversification and inclusive growth.

Recent developments
Growth accelerated to 7.1 percent in 2023
(4.6 percent per capita terms) bolstered bystrong mining sector performance. Bauxite
production surged by 22 percent, and gold
exports by 10 percent attributable to bothartisanal operators and new formal sector
companies. On the demand side, an investment surge (private and public) fueled
growth. The fiscal deficit widened to
1.6 percent of GDP in 2023 from 0.9 percent in 2022, due to a 1.3 percentage pointof GDP increase in capital expenditure.
Inflation decelerated but remained high,at 9.3 percent in 2023, down from 11.6
percent in 2022, aided by stable transport
costs and prudent fiscal and monetary
policy (reserve money increased only by
3 percent and broad money by 1.5 percent). However, food price inflation isestimated to have increased from 13.9
percent in 2022 to 16.2 percent in 2023.
Consequently, the US$2.15 international
poverty rate is expected to remain at 10.5
percent in 2023, same as in 2022. With
inflation easing, and to encourage credit
to the private sector, the central bank reduced its key rate by 50 basis points to
11 percent, and the reserve requirement
ratio from 15 percent to 13 percent in
September 2023.

FIGURE 2 Guinea / Actual and projected poverty rates andreal GDP per capita
Poverty rate (%)

Percent
14

40

Real GDP per capita (constant million LCU)

100

7.0

90

12

6.0

80

35
10

70

5.0

25

8

60

4.0

20

6

40

3.0

4

30

2.0

30

50

15
10

20

5
0
2021

2022

Debt (lhs)20232024 eFiscal defit (rhs)2025 f

2

10

0

0

1.0
0.0
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

2026 fInflation (CPI, rhs)

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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42

Apr 24

The current account balance (CAB)
widened to -12.9 percent in 2023, due toa significant decrease of trade surplus,
linked to FDI-related imports and a fall inexports price. Mining-related FDI, themain source of external financing, increased to 15 percent of GDP in 2023, while
the real effective exchange rate is likely tocontinue to appreciate.

OutlookMining will continue to drive growth
while the non-mining sectors, impacted
by the fuel depot explosion in midDecember 2023, recover. Growth willslow to around 4.9 percent in 2024
(2.4 percent per capita) and accelerate
to 6.3 percent on average in 2025–2026(excluding Simandou mine exports anticipated by end-2026), though below
the potential of 9.3 percent. Despite deceleration in agriculture and services,

the $2.15 international poverty rate is
projected to decline to 9.3 percent in
2024 and 8.1 percent in 2025 due toeasing food price inflation. Given thelimited poverty gains from mining-driven growth, redistribution mechanisms
to vulnerable populations and productivity gains in non-mining sectors will
be required for inclusive growth.
Inflation would decelerate to 8.8 percent
in 2024 and 8.1 percent on average in
2025-26, due to easing supply constraints
and improving road-network conditions,facilitating food distribution, as well as toprudent monetary policy including minimal fiscal financing.
The fiscal deficit (including grants) would
widen to 2.7 percent of GDP due to increased capital expenditures but decrease
to 2.1 percent in 2025-2026 consistent withprudent fiscal policies. Tax revenues are
to increase slightly in 2024 to 12.7 percent
of GDP, buoyed by tax administration reforms and additional mining revenues
from implementing the bauxite-reference-

TABLE 2 Guinea / Macro poverty outlook indicators

price mechanism as of July 2022. Electricity
subsidies are to decrease by 38 percent, per
the 2024 budget law, as utility company
reforms bear fruit, particularly the continued rollout of prepaid meters and intensified billing recovery efforts. Debt-to-GDP
would decrease slightly to 35.3 percent in
2024 and to average 32.0 percent in2025-2026, due to reduced domestic debt.
The CAB is forecast to remain high at-12.7 percent of GDP in 2024 as the FDIinduced trade deficit persists yet would
improve slightly during 2025-26 to an average -10.1 percent. Mining-related FDI,
the main source of external financing, is
expected to rise to 17 percent of GDP
in 2024, while the real effective exchange
rate would likely continue to appreciate.
Risks are tilted to the downside as political transition uncertainties leading up to
the 2025 elections could slow implementation of reforms, potentially reducing
private investment. On the upside, mining related FDI inflows could increase,reflecting planned new projects.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.0
0.6
16.8
8.3
0.8
-6.2

2022
3.7
7.6
-22.4
6.2
5.8
6.7

2023e
7.1
4.8
3.4
39.8
11.3
18.2

2024f
4.9
3.3
24.8
48.4
6.8
25.3

2025f
6.2
4.7
4.6
41.8
6.0
20.3

2026f
6.5
4.7
5.6
3.9
5.9
3.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.1
8.3
3.1
5.2

4.6
5.4
2.0
6.5

7.1
5.1
10.8
5.1

4.9
3.0
6.7
4.4

6.2
4.4
7.8
5.7

6.5
5.1
8.9
5.0

Inflation (consumer price index)

12.6

11.6

9.3

8.8

8.7

7.5

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

0.6
11.1

-0.3
12.1

-12.9
15.0

-12.7
17.4

-12.3
16.9

-7.8
9.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-1.9
15.2
41.5
-0.8

-0.9
13.2
36.7
0.0

-1.6
13.8
35.5
-0.4

-2.7
13.9
35.3
-1.6

-2.1
14.2
33.7
-1.2

-2.1
15.3
30.3
-1.3

11.1
44.5
86.7

10.5
44.5
87.3

10.5
44.7
87.6

9.3
41.2
85.0

8.1
38.5
82.6

7.8
38.4
83.8

3.2
10.8

3.1
10.7

3.1
10.7

3.2
10.6

3.1
10.5

3.1
10.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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43

Apr 24

GUINEA-BISSAU
Table 1

Key conditions andchallenges

2023

Population, million

2.2

GDP, current US$ billion

2.0

GDP per capita, current US$

918.1

International poverty rate ($2.15)

a

26.0
a

60.2

a

89.1

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

33.4

School enrollment, primary (% gross)

b

113.3

b

59.7

Total GHG emissions (mtCO2e)4.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2010); Life expectancy(2021).

Weak cashew export performance andhigh inflation kept growth at 4.2 percent
in 2023, undermining poverty reduction.
Budget slippages and lower revenues derailed fiscal consolidation efforts while infrastructure investment, rice subsidies,and energy arrears increased debt.
Growth should improve as energy andtransport infrastructure come online, but
its sustainability depends on institutional
reforms. The outlook is subject to downside risks from political instability, shocks
to the cashew sector, and climatic shocks.

Exports of raw cashew nuts, approximately 90 percent of merchandise exports, determine economic performance.
Cashew production is dispersed amongsmallholder farmers, whose income supports overall economic activity. Poverty
remains widespread – particularly in rural areas. Human development indicators
are among the lowest in the world, andlow access to basic services contributeto exclusion and marginalization. Political instability is chronic in Guinea-Bissau, the world’s most coup prone country, and recent regional and international
geopolitical uncertainty only threaten to
stoke domestic tensions further.
Access to credit is limited and the enabling
environment for private sector-led growthis weak due to poor infrastructure, low levels of human capital, and limited public
services. Recently, there have been investments to improve infrastructure, thoughmostly donor financed as fiscal space islimited by low domestic revenue mobilization and the relatively high wage bill.
Transparency and governance of stateowned enterprises is limited, especially thenational utility company, EAGB, which accrues substantial public debt in the energy
sector through government guaranteed
letters of credit that only partially cover
mounting arrears. Identifying contingent
fiscal liabilities is difficult, increasing fiscal
risks and amplifying the high risk of debt

distress and limiting capacity to absorb
shocks. Non-performing loans continue tomake the banking sector another possible
source of contingent liabilities.

Recent developments
Economic activity grew by 4.2 percent in
2023 (2.1 percent in per capita terms), unchanged from 2022. On the supply side,
growth was driven by agriculture and government infrastructure investment stimulating the construction sector. On the demand side, inflationary pressures caused
private consumption to fall.
Inflation remained high at 8 percent (y/y) in 2023, from 7.9 percent in 2022, driven by food and energy inflation. This
followed an average of 1 percent between
2015 and 2020.
A cashew campaign marred by problems,
including shipping container shortages,
smuggling, disruptions from legislativeelections, and low international demand,put exports at just 168,000tn in 2023 despite production of 260,000tn. This, alongwith high import costs, kept the current
account deficit (CAD) high at 9.4 percent.
Fiscal consolidation efforts were derailed
as higher-than-planned discretionary
spending and lower customs receipts
widened the fiscal deficit to 7.6 percent in
2023, from 6.1 percent in 2022. Legislativeelections, energy sector arrears accumulation, rice subsidies costing 0.2 percent ofGDP, and urban road infrastructure investments kept debt above the convergence criterion at 77.8 percent of GDP.

FIGURE 1 Guinea-Bissau / Evolution of main
macroeconomic indicators

FIGURE 2 Guinea-Bissau / Actual and projected poverty
rates and real GDP per capita

Percent, percent of GDP
8

Poverty rate (%)

Real GDP per capita (constant LCU)

100

6

90

4

80

2

70

0

60

-2

50

-4

40

-6

30

-8

20

-10

10

6000005000004000003000002000001000000-12
GDP growthFiscal balance02010 2012 2014 2016 2018 2020 2022 2024 2026

2016 2017 2018 2019 2020 2021 2022 2023e2024f 2025f 2026f
Current account balance

Sources: Ministry of Finance and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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44

Apr 24

To counter inflation across WAEMU countries, the Central Bank of West African
States (BCEAO) raised policy interest rates
by a cumulative 150 basis points since
mid-2022 to 3.5 percent for liquidity callsand 5.5 percent for the marginal lending
facility. However, inflation in the region(3.7 percent in 2023) was still above the
1-3 percent target range and foreign exchange reserves have been on a downward trend, estimated at 3.5 months ofimports at end-2023, down from
4.3 months at end-2022.
The combination of agricultural growthand high food prices is expected to haveleft poverty unchanged between 2022 and2023 at about 26 percent, with population
growth implying over 10,000 additional
poor people.

Outlook
Economic activity is likely to expand by 4.7
percent in 2024 (2.2 percent per capita) following a strong cashew campaign. Agriculture will drive growth with cheaper energy from regional energy project OMVG

stimulating the real sector. Easing of inflationary pressures and a strong cashew season will encourage private consumption.
Favorable weather conditions and dividends from government investments into
agricultural inputs over the last few years
should support strong cashew production.
Exports should markedly improve as nine
overland border routes are authorized forexports, curtailing smuggling. Historically, only cashew exports via the port of Bissau were authorized. This opening could
contribute to higher demand from possible
processing activity in neighboring countries. Additionally, Chinese firms should
enter the market for processing in Asia,
competing with India and Vietnam. Consequently, the CAD is projected to narrow
to 5.7 percent of GDP, mostly financed byconcessional loans and grants. Higher revenue collection and greater spending discipline could lower the fiscal deficit to 4.8
percent of GDP in 2024, or 5.6 percent including planned arrears clearance, withpublic debt falling to 75.6 percent of GDP.
The pace of the fiscal adjustment is highly
dependent on greater revenue mobilization, strengthened expenditure controls,
and increased grant financing, and thus

TABLE 2 Guinea-Bissau / Macro poverty outlook indicators

subject to considerable uncertainty given
the country’s ongoing political volatility.
The BCEAO may need to continue monetary tightening in 2024 to bring inflation
under control and in the context of rising
uncertainties over the withdrawal of
Niger, Mali, and Burkina Faso fromECOWAS and potential spillovers to WAEMU. These uncertainties are likely to increase investors’ risk perceptions leading
to tighter financing conditions and putting
additional strain on already low foreignexchange reserves.
A rebound in the agriculture sector will
partly drive the poverty rate to decline to25.4 percent in 2024. Further progress is
expected to be supported by lower foodprices reducing poverty to 24.1 percent in
2025, lifting over 15,000 out of poverty, andreaching 22.6 percent by 2026. Household
purchasing power will improve with higher cashew prices and lower food prices,
benefiting the poorest who spend a higher
share of their income on food.
The outlook is subject to substantial downside risks stemming from political instability, climate and agricultural shocks, uncertainty of EAGB operations, and financial
sector non-performing loans.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.4
16.0
16.0
-5.0
15.0
4.0

2022
4.2
3.0
7.0
15.7
-6.5
2.5

2023e
4.2
-1.2
5.5
23.0
-3.1
0.8

2024f
4.7
5.1
-8.5
5.6
12.2
3.0

2025f
4.8
4.4
-5.6
7.6
9.6
4.0

2026f
4.9
4.2
3.9
2.6
7.6
3.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.3
5.4
5.6
7.3

4.7
6.1
4.8
3.7

4.2
7.5
4.0
1.8

4.7
5.1
4.4
4.4

4.8
5.1
4.5
4.7

4.9
5.1
4.6
4.8

Inflation (consumer price index)
Current account balance (% of GDP)

3.3
-0.8

7.9
-9.6

8.0
-9.4

4.5
-5.7

2.0
-4.7

2.0
-4.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-5.9
19.1
78.8
-4.3

-6.1
15.2
80.4
-4.7

-7.6
13.9
77.8
-5.0

-4.8
16.0
75.6
-2.2

-4.0
15.3
72.8
-1.6

-4.0
15.2
70.4
-1.6

26.0
60.2
89.1

26.0
59.9
89.2

25.9
60.4
89.5

25.4
60.2
89.6

24.1
58.8
89.0

22.6
57.7
88.3

1.4
8.0

1.4
8.2

1.4
8.3

1.5
8.6

1.5
8.8

1.6
9.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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Apr 24

KENYAKey conditions andchallenges

Table 1

2023

Population, million

55.1

GDP, current US$ billion

107.5

GDP per capita, current US$

1950.1

International poverty rate ($2.15)

a

36.1
a

70.1

a

91.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

38.7

School enrollment, primary (% gross)

b

97.2

b

61.4

Total GHG emissions (mtCO2e)82.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Kenya’s growth rebounded after two consecutive years of droughts, as the poverty
rate continued its declining trend. The
Government of Kenya is taking bold measures to strengthen its macroeconomic policy framework. Fiscal consolidation remains
a top priority, which in combination with atighter monetary policy and improved global credit outlook made the country regain
access to international financial markets.
The outlook remains positive in the medium
term, although the failure to achieve fiscal
consolidation targets could exacerbate
Kenya’s debt vulnerabilities.

Kenya’s GDP growth accelerated in 2023
after two consecutive years of droughts.
Notwithstanding the cyclical rebound,long-term development challenges remain.
Years of public-sector led growth and debt
accumulation brought macroeconomic imbalances and did not create enough quality
jobs that can sustain higher wages and accelerate poverty reduction. Compoundedwith high trade costs, these imbalances
have generated a sluggish tradable sector
in the economy. During 2023, uncertainty
over future external financing were added
to regular low exports and FDI, creatingpressures on the foreign currency market.
Climate shocks are increasing in frequency and intensity, threatening the livelihoods of many Kenyans, especially in
dry and arid regions.
Kenya’s economic growth has not been
sufficiently inclusive, with the connection
between growth and poverty reduction
weakening. The poor have fewer household members working and are more likely to be engaged in subsistence agriculture
and low-productivity services sub-sectors
for employment. Strategies to enhance inclusive growth should focus on promoting
productive employment and strengthening resilience to adverse weather shocks.
The government has taken steps to reinforce its macroeconomic policy framework. A tighter monetary policy continued fiscal consolidation, and the returnto global capital markets through the issuance of a Eurobond in February 2024
helped to improve market confidence andforeign currency reserves. But there is
scope to do more. Despite strengthened
tax administrative measures, tax collection is characterized by low compliancelevels, while expenditure inefficiencies
and fiscal slippages are common. FDI isstill restricted by complex entry and licensing procedures which limit international integration, and the economy islosing competitiveness in major exporting
markets. Recent measures to strengthenmarket regulations and reduce the footprint of the State in the economy are positive, although there is space to enable agreater expansion of the private sector toraise productivity and create better jobs.

Recent developments
Kenya’s real GDP expanded by 5.4 percent
in 2023. The agricultural sector experienced a stronger than expected reboundafter two years of drought. The onset ofthe rains led to improved crop yields andlivestock health, which supported poverty
rates to resume their downward trajectory.
The $2.15 international poverty rate is projected to have declined from 35.8 percent
in 2022 to 35,1 percent in 2023.
Moreover, industry and services continued to show resilience despite surging
production costs, increased cost of credit,
and a depreciating shilling. The depreciated currency depressed imported oil
products, machinery, and transport

FIGURE 1 Kenya / Annualized quarterly real GDP growthand contributions to annualized real quarterly GDP growth

FIGURE 2 Kenya / Actual and projected poverty rates andreal private consumption per capita

Percentage points
12

Poverty rate (%)

10

Real private consumption per capita (constant LCU)

100

16000090

14000080120000

8

70

6

60

100000

50

80000

4

40

60000

2

30

40000

20

0

20000

10
0

-2
2021Q12021Q3

Agriculture
Taxes

2022Q12022Q32023Q1

Industry
GDP growth2023Q302015

Services

Sources: World Bank and Kenya National Bureau of Statistics.

2017

2019

2021

46

Apr 242025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

MPO

2023

equipment but did not result in higher
exports. As imports fell faster than exports and remittance flows held up, thecurrent account deficit narrowed to 3.9
percent of GDP in 2023. FX reserves
stood at US$ 7.1 billion or 3.7 months ofimport by January 2024, improving from
December 2023 but still below the Central Bank of Kenya’s (CBK) statutory minimum of 4.0 months of import cover.
Inflation fell to 6.9 percent by January2024, within the CBK’s target range of
5±2.5 percent, as falling commodity prices
and tight monetary policy offset exchangerate passthrough. During 2023, the CBK increased its policy rate by a total of 375 basis
points, including a 200-basis-point hike inDecember, with another increase of 50bps,
to 13 percent, in February 2024.
Fiscal consolidation continues as the government is expanding the tax base and rationalizing non-priority spending. However,revenue collection is lagging. Tax policy andtax administration measures were submitted to parliament by mid-December 2023 toensure meeting end-of-year targets. As ashare of GDP, public debt rose to 73.2 percent in 2023 from 70.6 percent in 2022.

Outlook
Kenya’s outlook remains positive in themedium term, with real GDP projected
to grow by 5.2 percent on average in
2024-2026. Persistent structural challenges
notwithstanding, a stronger macroeconomic framework and the regaining ofaccess to international financial markets
will spur investor confidence and private
investment, supporting capital inflows,
and freeing more credit to the private
sector through reduced domestic government borrowing. As reforms materialize, exports are projected to increaseas Kenya implements trade agreements
signed under the EU-EPA, AfCFTA, andpotential other trade agreements. FDI,
tourism, and remittance inflows will support external financing; the current account deficit is expected to remain within
3.9 and 4.1 percent of GDP. A more stable currency, moderating global and local inflation pressures, and, eventually,a more accommodative monetary policy
will accelerate credit growth.

TABLE 2 Kenya / Macro poverty outlook indicators

Ongoing fiscal consolidation is expected toreduce the fiscal deficit, which is projected to
decline to -4.1 percent of GDP in 2024, targetingaprimarysurplusof1.2percent.
Real per capita incomes are expected togrow, and the poverty incidence is expected
to resume its pre-pandemic downward
trend,decliningbynearlyapercentagepoint
each year toward pre-pandemic levels. The
US$2.15 poverty rate is expected to fall from35.1percentin2023to34.4percentin2024.
The outlook is subject to elevated uncertainty. The failure to achieve fiscal consolidation targets could exacerbate Kenya’s
debt vulnerabilities, especially due to still
high-debt service repayments. Climate
hazards could resume inflationary pressures and food insecurity, affecting
growth. Lower than anticipated growth ofinternational partners could undercut ongoing recovery in tourism, exports, and remittances. Elevated commodity prices
would further tighten financial condition,
weaken external balances, and impact inflation. The upside risks are linked to fasterthan expected normalization in global financing conditions and lower international fuel and food prices.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
7.6
6.2
6.0
10.8
15.3
22.2

2022
4.8
3.1
7.4
-1.1
10.7
4.5

2023e
5.4
5.0
5.7
0.1
-6.8
-7.8

2024f
5.0
4.9
1.6
5.3
8.7
3.0

2025f
5.3
5.3
0.8
7.8
9.6
5.5

2026f
5.3
5.4
1.1
7.8
9.9
6.4

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

7.1
-0.4
7.5
9.6

4.5
-1.6
3.9
6.7

5.4
6.1
2.2
6.2

5.0
4.1
4.0
5.6

5.3
4.4
4.1
5.9

5.3
4.5
4.3
5.9

Inflation (consumer price index)

6.1

7.6

7.7

7.0

5.0

5.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-5.2
0.0

-5.1
0.3

-3.9
0.4

-3.9
0.6

-4.0
0.7

-4.1
0.8

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-7.3
16.8
68.1
-2.5

-5.9
17.1
70.6
-0.8

-5.2
17.8
73.2
0.0

-4.1
19.1
71.8
1.2

-3.3
19.3
69.0
1.7

-3.2
19.4
66.6
1.7

36.1
70.1
91.3

35.8
69.8
90.9

35.1
69.2
90.1

34.4
68.5
89.2

33.6
67.8
88.2

32.7
67.0
87.2

3.5
26.5

4.6
26.6

5.0
26.4

5.9
26.1

6.5
25.8

6.4
26.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2013-, 2018-, and 2021-KCHS. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projection using point to point elasticity at regional level with pass-through = 1 based on private consumption per capita in constant LCU.

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Apr 24

LESOTHO

Key conditions andchallenges

Table 1

2023

Population, million

2.3

GDP, current US$ billion

2.3

GDP per capita, current US$

972.0

International poverty rate ($2.15)

a

32.4
a

54.6

a

81.0

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

44.9

School enrollment, primary (% gross)

b

110.0

b

53.1

Total GHG emissions (mtCO2e)

4.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2017 PPPs.
b/ Most recent WDI value (2021).

Growth increased to 2 percent in 2023
and will remain at around this rate over2024-26. The outlook is subject to downside risks from delays in the Lesotho
Highlands Water Project (LHWP), andthe implementation of reforms to control
public spending, raise efficiency, as wellas public investment effectiveness. Further delays in implementing reforms tobolster private sector development andhuman capital will also stall growth. Weaker global and regional growth, rising geopolitical tensions, and climate shocks could
adversely affect the growth trajectory.

Growth rate has averaged only 1.2 percent
since 2010, indicating that the consumption-driven growth model anchored on alarge public sector has not been sustainable. Weaknesses in fiscal policy and management has undermined public spending
inefficiencies. The large public sector has
also crowded out the private sector, curtailing business investment and the development of new private sector activities. Domestic entrepreneurs face difficulties in accessing credit. Gaps in the regulatory competition and investment frameworks, including for foreign direct investment, raise uncertainty and costs of doing business. Large infrastructure gaps,
including in information and communications technology, dampen private investment and the country’s integration in
global value chains.
Fiscal imbalances have been persistent
overtime, as spending was not compensated by higher revenue, leading to higher
public debt. Volatile Southern African
Customs Union (SACU) receipts, poor
cash management, and deficiencies in public procurement processes have led to theaccumulation of arrears, which threaten
macroeconomic stability.
Weak regional and global demand are undermining exports, which remain heavily
concentrated to apparel and textile, andnatural resources. Policy measures areneeded to unlock private investment

FIGURE 1 Lesotho / Fiscal dynamics

Percentage of GDP
70

and diversify the economy. The future of
the textile sector hinges on the renewalof the United States’ African Growth andOpportunities Act (AGOA) beyond 2025
and measures to relaunch the competitiveness of the sector. South Africa’s
weak economy affects growth prospects
through trade and lower remittances.
Limited private sector activity andskills mismatches contribute to highunemployment, estimated at 22.5 percent in 2019 (reaching 38.3 percent
when discouraged job seekers are included), and high poverty rates. Over
one-third of the population was estimated to live on less than US$2.15 per
day (2017 PPP) in 2022. Lesotho is in
the top quintile of countries with themost unequal income distribution.

Recent developments
The economy expanded by an estimated
2 percent in 2023, mainly driven by the
public sector, especially the LHWP-II
megaproject and its spillover effects ontransportation, logistics, and financial services. The project experienced some delays in early 2024 owing to strikes, but
activity has since resumed. On the downside, weaknesses in public investment
management and efforts to control
spending are delaying the implementation of capital projects. On the supply
side, the industrial sector grew by about
5 percent, while the expansion of the
agricultural sector, while still positive,
decelerated significantly.

FIGURE 2 Lesotho / Actual and projected poverty rates andreal GDP per capita
Percentage of GDP
860

Poverty rate (%)

Real GDP per capita (constant LCU)

90

10500

80

6

10000

70

50

4

40

2

30

0

20

-2

10

-4

0

-6

60

9500

50

9000

40
30

2021
2022
Revenues

2023e
2024f
Expenditures

8500

20

8000

10
0

7500
2017

2025f
2026f
Fiscal balance (rhs)

Source: World Bank.

2019

2021

48

Apr 242025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2023

Headline inflation decreased from its
peak of 9.8 percent in July 2022 to 7.2
percent in December 2023, owing primarily to the moderation in fuel and foodprices, but pressures are emerging again.
the central bank revised upwards thenet international reserves target floor to
US$750 million in January 2024 and increased the policy rate to 7.75 percent inJuly 2023, which stands below the South
African policy rate.
The fiscal balance improved dramatically,
from a deficit of 4.3 percent of GDP in
2022 to a surplus of 5.5 percent of GDP
in 2023, owing to the more than doubling of SACU revenue. The government
has spent more than half of SACU windfall in FY 2023/24, to increase public investment and recurrent spending by 2
percentage points of GDP each. Recurrent spending increases were driven bytransfers to other public sector bodies, social benefits, and subsidies. The public
sector wage bill growth kept constantas a share of GDP, even though it increased above inflation. Limited progresshas been made on arrears’ clearance,
which have emerged owing to recurrent
fiscal deficits in the past, and weaknesses
in public financial management and in
public procurement.

Outlook
Growth is projected to remain subdued, ataround 2-2.5 percent over the next three
years. This rate will be insufficient to return the economy to its pre-pandemic levelby 2026 and significantly reduce poverty
and inequality rates. The implementationof the LHWP-II project should continue todrive growth, but private activities are expected to expand modestly as longstanding structural constraints remain unaddressed. Consequently, the US$2.15 per
day poverty rate is projected to fall only
slightly from 37.0 percent in 2022 to36.1 percent in 2025.
Inflation is expected to gradually moderate to 5.0 percent in line with declining
energy and food prices, but to remain relatively high owing to the rand depreciation. The current account deficit is projected to widen due to higher imports associated with the LHWP-II, and weaker
demand for exports, driven by uncertainties surrounding the renewal of AGOA,
and a deceleration in the US economy.
After the large fiscal surplus registered in
2023, the government’s accounts are expected to return to deficits, even though

TABLE 2 Lesotho / Macro poverty outlook indicators

SACU transfers are projected to remain elevated, risking undermining macroeconomic stability. Although the projected
deficits will be driven by public investment, and there are substantial gaps inproductive, social, and resilient infrastructure, public investment prioritization andmanagement have been weak, raising concerns about the country’s absorptive capacity and resource misallocation. Using
the SACU windfall to implement reforms
that stimulate private sector investment
and bring down recurrent spending would
strengthen growth.
Domestic and external risks are tilted
to the downside. Weaker global and regional growth, and the intensification ofgeopolitical conflicts, would impact negatively on diamond exports and remittances. This and failure to renew AGOA
would widen the current account deficit,
while further delays in the LHWP-II
would lower growth. On the positiveside, devising a plan to clear arrears
and delivering on it would strengthen
the macroeconomic policy framework
and public spending. Climate shocks
could weaken the outlook and endanger
gains in poverty alleviation, underscoring the need to strengthen climate risk
management and resilience.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.9
-6.7
-5.3
6.5
5.1
-0.4

2022
1.1
9.1
2.4
10.8
36.7
22.5

2023e
2.0
3.6
2.2
54.7
2.2
10.3

2024f
2.2
3.5
17.9
9.3
2.2
10.8

2025f
2.5
3.2
11.5
26.7
2.2
11.3

2026f
2.3
3.2
12.3
18.3
2.0
10.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.9
-16.0
4.7
2.3

1.1
12.5
5.0
-0.8

2.0
2.4
5.0
1.0

2.2
2.4
5.3
1.1

2.5
2.4
5.0
1.6

2.3
2.4
5.0
1.3

Inflation (consumer price index)

6.0

8.3

6.4

5.3

5.0

5.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-4.1
1.2

-6.2
1.2

-5.5
1.4

-6.2
1.9

-6.6
1.4

-6.4
1.2

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.3
50.2
60.4
-3.3

-4.3
49.1
60.6
-3.4

5.5
57.6
57.5
6.4

-2.5
58.9
54.9
-1.6

-0.8
59.1
51.2
0.0

-1.5
59.6
47.7
-0.8

37.0
59.7
84.8

37.0
59.7
84.8

36.8
59.4
84.5

36.6
59.0
84.3

36.1
58.6
83.8

35.6
58.3
83.6

1.3
57.9

2.3
58.1

2.6
58.2

2.8
58.4

2.9
58.6

2.1
58.5

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2017-CMSHBS. Actual data: 2017. Nowcast: 2018-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2017) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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49

Apr 24

LIBERIA

Key conditions andchallenges

Table 1

2023

Population, million

5.4

GDP, current US$ billion

4.3

GDP per capita, current US$

799.5

International poverty rate ($2.15)

a

27.6
a

60.6

a

88.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.3

School enrollment, primary (% gross)

b

72.9

b

60.7

Total GHG emissions (mtCO2e)

17.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ Most recent WDI value (2021).

Liberia’s economy expanded by an estimated 4.7 percent in 2023. Inflationarypressures increased due to rising food andtransportation costs. Medium-term
growth prospects are promising but require maintaining macroeconomic stability, prudent fiscal consolidation, and implementation of ongoing structural reforms in key enabling sectors. However,risks to the outlook are tilted to the downside as inflationary pressures, fiscal slippages, and fluctuations in commodity
prices could undermine macroeconomic
stability and growth.

Since 2021, Liberia has seen steady economic progress, but not at a rate fastenough to accelerate the country's efforts
to reduce poverty. The medium-term outlook for the country is promising; however, to accelerate growth, macroeconomic
stability and fiscal sustainability must be
upheld in the near term, and infrastructure
and private investment enhanced in themedium term. Macroeconomic stability
must be complemented by institutional
reforms, enhancements in the businessenvironment, and significant upgrades tobasic services and infrastructure to unlock the country's growth potential. In
addition, investing in human capital andbuilding climate resilience are essential
for long-term growth and breaking thecycle of entrenched poverty. Liberia has
limited access to health care, education,and basic utilities by regional and global
standards, and despite being among thenations with the lowest greenhouse gas
emissions, the country faces significant
challenges in adapting to consequences ofclimate change.

Recent developments
Liberia’s economy expanded by an estimated 4.7 percent in 2023, driven mainly
by mining, specifically gold production.

Growth in the primary sector was sluggish–1.4 percent, as the outputs of key agricultural products such as rubber and crude
palm oil declined by 2.0 percent and 10.7
percent, year-on-year (y/y), respectively.
The secondary sector expanded by 13.9
percent, led by mining. Gold production
increased by 16.4 percent (y/y) in response
to higher international demand, while ironore output grew by 1.0 percent (y/y). In
manufacturing, cement production expanded by 5.6 percent, driven by increased
construction activity. The services sector
expanded by 3.8 percent.
Headline inflation rose to 10.1 percent in
2023, from 7.6 percent in 2022, driven byincreases in transport and food prices, anda weaker Liberian dollar. As of December
2023, the Liberian dollar to US dollar exchange rate had increased by 22.0 percent(y/y) but was broadly stable during the last
half of the year, trading at L$186.6 per US
dollar. Nonfood inflation averaged 10.3
percent in 2023, down slightly from 10.6
percent in 2022, while food inflation averaged 12.3 percent, from a disinflation of
1.6 percent during the same period. Foodprices will remain a major driver of inflation and will continue to have a disproportionate impact on the poor, who are net
consumers of food and are at risk of foodinsecurity and falling into deeper poverty.
The rice sector remains vulnerable to externalities, as trends in rice supply, demand,and prices shape food insecurity andpoverty in Liberia. Although rice accounts
for more than 20 percent of total food consumption, its price remains volatile in themarket. This has recently compelled thegovernment to intervene, halting all price

FIGURE 1 Liberia / Real GDP growth and contributions toreal GDP growth

FIGURE 2 Liberia / Actual and projected poverty rates andreal private consumption per capita

Percent, percentage points
7

Poverty rate (%)
100

1000

6

90

900

80

800

70

700

60

600

50

500

40

400

30

300

20

200

10

100

5
4
3
2
1

Real private consumption per capita (constant LCU)

0

0
2021
Agriculture

2022

2023e
Industry

2024f

2025f

Services02007 2009 2011 2013 2015 2017 2019 2021 2023 2025

2026f

Real GDP growth

Sources: Liberian authorities and World Bank staff estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

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50

Apr 24

increases and looking at ways to offer alternative varieties of rice. The extreme international poverty rate (US$2.15 per person per day) is estimated to have declined
by 1.1 percentages points to 31.3 percent in
2023, from 32.4 percent in 2022.
In 2023, the Central Bank of Liberia (CBL)
raised the policy rate twice in May andJuly by 500 basis points cumulatively to
20.0 percent to rein in inflation. The CBL
also removed the ceiling on the offeredamount of CBL bills to help accommodate the growing oversubscription, absorb the excess liquidity in the banking
system, and strengthen its monetary policy operations. The financial sector remained adequately capitalized with minimum capital adequacy ratio at 21.2 percent, well above the floor of 10 percent.
Non-performing loans as share of totalloans also declined to from 16.4 percent
to 11.2 percent, slightly above the tolerable levels of 10 percent.
Liberia’s fiscal deficit remained high, ataround 5.5 percent of GDP due to declines
in revenue and grants and increase in consumption spending. The fiscal deficit was
mainly financed by concessional resources- (i.e., budget support loans and IMF Special Drawing Rights). In March 2024, the
new Government submitted a revised 2024
budget to the legislature for approval.

The current account deficit is estimated tohave risen to 24.4 percent of GDP in 2023,
up from 17.7 percent in 2022. The increasein current account deficit was driven bytrade dynamics. The trade deficit worsened to 18.4 percent of GDP, from 11.8 percent in 2022, as growth in imports driven
by minerals, machinery, and petroleum
outpaced the growth in exports. The current-account deficit was financed by net
IMF credit, loans, and drawdowns of grossofficial reserves. By December 2023, thegross external reserves fell to US$496 million (about 2.3 months of imports), from
US$644 million (3.0 months of imports) in
December 2022.

Outlook
Liberia’s medium-term growth prospects
are positive on balance. The economy is expected to expand by 5.4 percent in 2024
and average of 5.9 percent in 2024–26.
Medium-term growth prospects require
maintaining macroeconomic stability, prudent fiscal consolidation, and implementation of ongoing structural reforms in key
enabling sectors.
Tightening monetary policy will ease inflationary pressures and bring inflation

TABLE 2 Liberia / Macro poverty outlook indicators

down to 5.4 percent by 2026. The fiscal
deficit is projected to moderate to an average of 3.3 percent of GDP in the medium term as the government strengthens
domestic resource mobilization and expenditure controls. The current-accountdeficit is expected to remain elevatedin the medium term due to a surge
in aggregate demand driven by foreign
direct investment (FDI) related imports.
The deficit will be financed by FDI inmining, private financing flows, and disbursements of project grants and loans.
Real income per capita is expected to growand poverty incidence is expected to decline by 3.6 percentage points, from 29.6
percent in 2024 to 26.0 percent in 2026 as
the government addresses supply side
constraints, stimulates growth and job
creation, and takes measures to combat
food insecurity and climate vulnerabilities by mitigating rising food prices andtightening macroeconomic policy to reduce inflationary pressures.
However, the outlook is not without significant risks. Inflationary pressures resulting from elevated import prices (especiallyfood and fuel), combined with potential
decrease in export prices (such as rubber,iron ore, and gold), and fiscal slippages
could undermine macroeconomic stability
and hamper the recovery in growth.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.0
4.7
0.2
-7.9
14.7
1.8

2022
4.8
3.3
-5.7
9.4
7.7
3.1

2023e
4.7
3.5
0.0
12.9
8.5
7.0

2024f
5.3
3.7
-6.0
11.8
13.1
7.3

2025f
6.2
3.8
-2.3
12.6
13.6
7.5

2026f
6.3
3.9
6.2
9.0
13.6
7.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

4.8
3.3
13.3
3.0

4.8
5.9
6.7
2.8

4.7
1.4
13.9
3.8

5.3
5.0
6.3
5.1

6.2
5.7
7.5
6.0

6.3
5.9
7.0
6.3

Inflation (consumer price index)
Current account balance (% of GDP)

7.8
-17.8

7.6
-17.7

10.1
-24.4

7.7
-21.7

5.6
-21.9

5.4
-21.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.4
27.2
53.2
-1.6

-5.6
21.5
53.4
-4.6

-5.5
20.8
54.5
-4.5

-3.2
22.9
55.4
-2.3

-3.7
22.4
55.6
-2.9

-3.1
20.7
53.7
-2.3

33.4
69.0
93.1

32.4
68.1
92.8

31.3
67.5
92.5

29.6
66.3
91.9

27.8
64.3
91.4

26.0
62.1
90.6

3.2
6.4

3.2
6.3

3.1
6.2

3.1
6.1

3.2
5.9

3.2
5.8

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2016-HIES. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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Apr 24

MADAGASCAR
Table 1

Key conditions andchallenges

2023

Population, million

30.3

GDP, current US$ billion

16.5

GDP per capita, current US$

545.5

International poverty rate ($2.15)

a

80.7
a

92.4

a

98.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

42.6

School enrollment, primary (% gross)

b

138.2

b

64.5

Total GHG emissions (mtCO2e)41.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2012), 2017 PPPs.
b/ Most recent WDI value (2021).

Economic growth is estimated to haveremained unchanged at 3.8 percent in
2023 due to sluggish export performance linked to the global economic
slowdown and unfavorable export pricemanagement. It is projected to pick up
to 4.6 percent over 2024-26, driven by
the recovery of international trade andtourism and increased investments inthe telecommunications and mining sectors. The elevated poverty rate is projected to abate slightly. Risks remain
substantial, including fiscal pressures
stemming from state-owned enterprises.

Persistently low economic growth andrapid population growth have resulted in
declining income per capita and a highpoverty rate. Madagascar’s 2023 real GDP
per capita represents only about 56 percent
of its level in 1960. The international poverty rate (US$2.15 per person per day at 2017
PPP) has stagnated at around 80 percent
over the past decade, positioning the country among the most impoverished globally. Weak governance, distortionary policies,
and low investment in physical and humancapital have led to low productivity growthand slow structural transformation. Most of
the workforce remains engaged in low-productivity activities, and 80 percent of the
population still relies on agriculture as theirprimary source of income.
Furthermore, Madagascar’s vulnerability
to climate and natural shocks, including
cyclones and droughts, contributes tohigher growth volatility and weighs on potential growth. On average, four cyclones
hit Madagascar each year, damaging infrastructure and agricultural fields, while thesouth is increasingly exposed to drought.
To reduce poverty, Madagascar needs robust and sustained growth, along withimproved resilience to shocks. Sustainedreforms are vital to ensure dependable
and affordable access to infrastructure,develop human capital, and enhance governance. Recent reforms introduced in themining code, telecommunications sector

FIGURE 1 Madagascar / Real GDP growth and contributions
to real GDP growth

licensing, and the investment law could
improve investors’ confidence, paving theway for higher investment and productivity gains. Deepening these reforms andensuring adequate governance and financial sustainability of state-owned enterprises should be prioritized.

Recent developments
Economic growth remained unchanged at
3.8 percent in 2023, driven by tourism,
with arrivals nearly doubling from 2022
and high demand for telecommunications
and the food industry. Hence, domestic expenditure has driven growth, while thecontribution to growth from net exports
has been marginal. Although mineral export volumes (nickel, cobalt) have beenmoderately strong and gold export has resumed after suspension in 2020, lower demand and prices for key Malagasy exports
such as textiles, vanilla, and spices havedampened overall export performance.
Inflation has been declining since Q2 2023
due to high base effects related to the fuelprice hike in July 2022 and a tighter monetary policy stance. The central bank increased its deposit and marginal lending
facility rates twice since early 2023 for a cumulative increase of 90 basis points. Concurrently, headline inflation decreased
from a peak of 12.4 percent (yoy) in March2023 to 7.5 percent in December 2023. Core
inflation, which excludes food and energy
price hikes, declined from 7.9 percent in
December 2022 to 6.3 percent in December
2023. Despite an estimated rise of 8 percent

FIGURE 2 Madagascar / Actual and projected poverty rates
and real GDP per capita
Poverty rate (%)

Real GDP per capita (constant LCU)

100

84000090

82000080

80000070

78000060

76000050

74000040

720000302070000010

6800000

6600002010 2012 2014 2016 2018 2020 2022 2024 2026

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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52

Apr 24in domestic rice production in 2023, rice
prices remained high due to market distortions. Lower international energy prices
have not impacted local prices owing to
the government’s price controls.
The fiscal deficit is estimated to have declined from 6.4 percent of GDP in 2022 to
4.9 percent in 2023. The tax-to-GDP ratio is
estimated to have increased from 9.5 percent in 2022 to 12.6 percent in 2023, mainly
due to the one-off impact related to the recovery of petroleum tax arrears accumulated in 2022 (equivalent to 1.8 percent ofGDP). Nonetheless, the tax-to-GDP ratio
remains below the 12.9 percent budget target. Government expenditure increased
from 17.2 percent of GDP in 2022 to 19.6
percent in 2023 and included a large transfer to the public water and electricity utility, JIRAMA. The budget deficit was mainly
financed by concessional external financing. External and overall public debt distress risks remain moderate.
The current account deficit narrowed from
5.4 percent of GDP in 2022 to an estimated
4.5 percent in 2023, with goods imports declining faster than exports. Despite this improvement, the ariary depreciated by 8.2
percent on average against the US dollar
and 11 percent against the euro in 2023.

This depreciation was influenced by highinflation and heightened investor risk
aversion, partly due to uncertainties related to the presidential elections.

Outlook
Growth is expected to accelerate to an average of 4.6 percent over 2024-26, driven
by favorable base effects, enhanced trade
and tourism opportunities, and a new
impetus for private investment following impactful structural reforms in pivotal sectors such as mining, digital technology, and the investment climate. The
potential extension of the United States’
African Growth and Opportunity Act
could positively impact economic activities, particularly investment in the textile
industry. Nevertheless, the poverty rate is
projected to stay at about 79.7 percent in
2024, as job creation is expected to remain
limited compared to population growth.
Hence, about 24.8 million people are projected to remain poor, a number larger than the total population of Burundi
and South Soudan altogether, where thepoverty rates also are very high.

TABLE 2 Madagascar / Macro poverty outlook indicators

The current account deficit is projected
to remain stable at around 4.7 percent
of GDP over 2024-26, mainly reflecting
a narrowing goods and services trade
deficit, in line with rising exports frommining and tourism and decreasing crude
oil prices. The current account deficit isexpected to be financed mainly by foreign
direct investments and external financing
for the public sector.
The fiscal deficit is projected to narrow to
an average of 3.1 percent of GDP over2024-26, driven by increased revenue collection, notably from the mineral sector, as
mining projects ramp up production after
the enactment of the new mining code. The
public debt-to-GDP ratio is expected to remain high but sustainable, averaging 57
percent of GDP over 2024-26.
Risks to the outlook include recurring natural hazards, ongoing international conflicts,
and a global economic slowdown. Domestic
downside risks include the financial stressof state-owned enterprises, particularly JIRAMA and Madagascar Airlines, and delay
in implementing key structural reforms.
The enactment of a new mining code and theresumption of major investment projects
represent upside risks that could significantly boost economic growth.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
5.7
3.0
0.2
12.7
55.0
12.7

2022
3.8
2.5
-8.0
-19.1
27.5
19.8

2023e
3.8
2.6
2.3
6.2
2.4
1.7

2024f
4.5
2.9
3.0
7.1
12.6
10.7

2025f
4.6
3.0
3.6
7.5
15.8
14.1

2026f
4.7
3.1
4.0
8.0
16.3
15.1

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.5
-1.6
19.7
7.3

3.7
0.9
10.9
3.1

3.8
2.2
7.6
3.4

4.5
2.3
10.2
3.7

4.6
2.3
10.3
3.8

4.7
2.3
10.4
3.9

Inflation (consumer price index)

5.8

8.2

9.9

7.8

7.3

6.9

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-5.0
1.7

-5.4
2.1

-4.5
1.6

-4.8
2.3

-4.7
2.4

-4.7
2.5

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.8
11.1
52.3
-2.2

-6.4
10.8
56.9
-5.8

-4.9
14.7
57.6
-4.0

-3.8
13.3
57.1
-2.9

-3.2
13.5
56.4
-2.2

-2.4
14.1
57.4
-1.6

81.0
92.6
98.2

80.6
92.4
98.1

80.2
92.2
98.1

79.7
91.9
98.0

79.1
91.7
97.9

78.4
91.4
97.8

1.2
11.9

1.3
12.3

1.3
12.1

2.4
12.3

2.8
12.5

2.9
12.8

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2012-ENSOMD. Actual data: 2012. Nowcast: 2013-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2012) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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MALAWI

Key conditions andchallenges

Table 1

2023

Population, million

20.9

GDP, current US$ billion

14.1

GDP per capita, current US$

672.9

International poverty rate ($2.15)

a

70.1
a

89.1

a

97.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

38.5

School enrollment, primary (% gross)

b

126.4

b

62.9

Total GHG emissions (mtCO2e)

21.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Economic growth rose slightly to 1.5 percent in 2023 from 0.9 percent in 2022.
This was supported by the resumption ofelectricity production at the Kapichira hydro-electric plant, but the unavailabilityof production inputs and the impact ofTropical Cyclone Freddy constrained therecovery. Growth is estimated at 2.0 percent in 2024. This has been impacted by aprolonged dry spell and the continued
scarcity of foreign exchange. High inflation and food shortages will impact
household welfare, increasing the poverty
rate to 72 percent in 2024.

Vulnerabilities in the Malawian economy
continue to be exacerbated by weatherand climate-related shocks paired withscarcity of foreign exchange that constrains the importation of raw materials.
Recurring floods and prolonged dry spells
compounded by limited availability ofagricultural inputs and weak domestic
and regional market integration keep
agricultural output below its potential.
Persistent liquidity challenges and distortions in foreign exchange markets continue to constrain the importation of raw
materials for the production process, further undermining growth.
A lack of trade dynamism and low levels ofinvestment persist. Lower agricultural output and slow implementation of policies tosupport crop diversification and economictransformation constrain exports, as does
the widespread presence of non-tariff barriers, strict capital controls, and high trade
costs. These in turn affect the accumulationof foreign exchange reserves. With continued high import demands, the current account deficit remains elevated, placing additional pressure on reserves.
Fiscal imbalances have been a central challenge to reducing inflation, following yearsof an expansionary fiscal policy. Slow implementation of public financial management reforms, paired with growing statutory expenditure requirements continue
to exert upward pressure on government

FIGURE 1 Malawi / Fiscal balance and public debt aspercent of GDP
Percent of GDP
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12

expenditure. With limited availability of
external financing and high levels of domestic borrowing, public debt continues torise, resulting in debt servicing requirements in excess of 35 percent of revenues.
The prevalence of poverty remains high,with rates exceeding 70 percent - one of
the highest in the world. The continued
high rate of poverty is exacerbated by asluggish economic recovery and persistent
food shortages following a series of weather shocks, high susceptibility to fluctuations in food prices, and ongoing rapid
population growth.

Recent developments
The impact of Tropical Cyclone Freddy andthe limited availability of agriculture inputs
weighed on agricultural production in 2023.
While low liquidity and persistent unavailability of foreign exchange constrained importation of raw materials for production,
the early resumption of electricity production at Kapichira supported improved economic activity in industry and services,
contributing to an estimated economic
growth rate of 1.5 percent in 2023.
Weak export recovery amidst high imports
and low foreign investment has resulted in acurrent account deficit of 16.1 percent of
GDP.Grossofficialreservesremainedbelow
1 month of import cover throughout 2023.
To help restore foreign exchange reserves inlate 2023, the Reserve Bank of Malawi (RBM)
announced the 44 percent adjustment ofkwacha-US dollar exchange rate, together
with several measures to increase the

FIGURE 2 Malawi / Actual and projected poverty rates andreal GDP per capita
Poverty rate (%)

Percent of GDP
90

Real GDP per capita (constant LCU)

120

70

390000380000100

503700008030
1036000060

350000

-10
-30

40

-50

20

340000330000320000

-70
2010

2012

2014

2016

Fiscal Balance (lhs)

2018

2020

2022

2024

2026

0

-90

Public Debt (rhs)

Sources: Ministry of Finance, Economic Planning and Development, and World Bank.

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3100002010 2012 2014 2016 2018 2020 2022 2024 2026
International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

54

Apr 24

kwacha flexibility. The exchange rate premium significantly narrowed at the end of2023, from 60 to around 10 percent.
Inflation remains high. Despite the RBM’sefforts to tackle mounting inflation by
tightening monetary policy, persistently
high food prices owing to shortages on thedomestic market, coupled with the delayed depreciation of the Malawi kwacha,
resulted in substantial inflationary pressures. With money supply growth increasing, driven mainly by the revaluation benefits on foreign currency denominated deposits, inflation has remained at around33.5 percent since February 2024.
Supported by exchange rate gains on tradetaxes, disbursements of grants, and remittance of dividends, revenue collection increased to 17.2 percent of GDP in fiscal
year (FY) 2023/24. However, higher-thanplanned expenditures, reaching 29.0 percent of GDP in FY 2023/24, will partially
offset improved revenue performance,
pushing the fiscal deficit to 11.7 percent
of GDP. This has predominantly been financed by the incurrence of domestic liabilities, mostly from the banking sector, in turncrowding out credit to the private sector.
The continuous rise in prices, especiallyfor food and transportation, has adversely
affected household consumption. Coupledwith food shortages, this has exacerbatedfood insecurity and pushed many intopoverty in 2023. The proportion of people
living on less than $2.15 per day increased
to 71.7 percent in 2023.

Outlook
Malawi’s economy is projected to grow by
2.0 percent in 2024 – a contraction in percapita terms given 2.6 percent population
growth. Limited availability of agricultural
inputs and the impact of prolonged dry
spells during the growing season will result in reduced agricultural output. Continued liquidity challenges in foreign exchange markets are expected to continue
affecting the importation of raw materials
and productions inputs, constraining economic activity in industry and services.
Headline inflation is expected to remainhigh and average 27.4 percent in 2024. The
disinflationary impact of tightening monetary policy will be offset by lower agricultural output and resultant pressures onfood prices. The adjustment of energy andother utility prices necessitated by the adjustment of the kwacha and planned for2024 will add to inflationary pressures.

TABLE 2 Malawi / Macro poverty outlook indicators

Revenue is projected at 21.5 percent of
GDP in FY2024/25. This outcome assumes the achievement of ambitious tax
revenue targets as well as increased disbursements of grants which are expected
to reach 5.4 percent of GDP, the highest
in the last decade. Expenditure is expected to slightly moderate to 28.4 percent of GDP, thus translating to a projected fiscal deficit of 6.6 percent of GDP
in FY2024/25. Failure to attain ambitious
revenue targets and overspending would
widen the deficit further, which will add
to an already high and unsustainablepublic debt burden.
Imports are expected to continue rising,driven in particular by the need for increased food imports to address domestic
shortages. While exports are also projected
to recover, the impact of prolonged dry
spells on agricultural production may constrain export growth. The current accountdeficit is projected to remain high at 20
percent of GDP.
With heightened food insecurity, bothfrom high food prices and shortages owing
to anticipated lower agriculture output,
poverty is expected to worsen in 2024. The
proportion of people living below thepoverty line of $2.15 a day will increaseslightly to 72 percent in 2024.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.8
2.6
-1.1
6.5
2.5
2.5

2022
0.9
0.6
-5.8
12.4
3.1
3.9

2023e
1.5
3.8
14.8
-15.0
3.5
3.9

2024f
2.0
4.0
6.9
-2.5
8.8
9.6

2025f
3.9
4.8
-2.3
6.3
6.7
6.3

2026f
4.1
5.1
6.9
-9.4
6.0
3.9

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.8
5.2
1.9
2.0

0.9
-1.0
0.9
1.8

1.5
0.6
1.6
1.9

2.0
-1.2
2.2
3.2

3.9
3.7
3.3
4.2

4.1
3.0
3.1
4.8

Inflation (consumer price index)

9.3

20.9

28.7

27.4

20.8

16.7

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-15.2
0.8

-17.3
1.6

-16.1
1.5

-20.0
2.1

-19.6
2.3

-17.9
2.5

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.9
14.7
60.6
-3.1

-8.9
15.0
76.7
-3.6

-10.3
15.3
81.4
-3.9

-11.8
17.2
80.7
-7.1

-7.3
21.1
79.8
-1.1

-7.3
17.7
76.4
-2.3

70.6
89.4
97.4

71.3
89.5
97.5

71.7
89.7
97.5

72.0
89.8
97.5

71.4
89.6
97.5

70.9
89.4
97.4

1.5
7.6

1.4
7.6

1.4
7.7

1.4
7.7

1.3
7.7

1.4
7.7

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2019-IHS-V. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2019) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU.

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MALI

Key conditions andchallenges

Table 1

2023

Population, million

23.3

GDP, current US$ billion

21.8

GDP per capita, current US$

936.3

International poverty rate ($2.15)

a

20.8
a

56.1

a

85.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.7

School enrollment, primary (% gross)

b

72.6

b

58.9

Total GHG emissions (mtCO2e)48.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ Most recent WDI value (2021).

GDP growth stabilized at 3.5 percent(0.6 percent per capita) in 2023, below
expectations, due to lower agricultural
output and an electricity crisis, resulting in limited poverty reduction withan extreme poverty rate of 20.2 percent
in 2023. Growth is projected to weakenslightly in 2024. The outlook is subject
to downside risks from rising insecurity, increasing financing costs, impactsof the announced ECOWAS withdrawal,
and climate-related shocks.

Mali’s economy has experienced little
structural change over the last three
decades. Agriculture and low-productivity services dominate the economy;
manufacturing remains limited and concentrated in agro-industries and cotton
ginning. Exports are dominated by gold
and cotton and vulnerable to commodity-price and climatic shocks. GDP
growth per capita stagnated during thelast decade limiting poverty reduction,
while human development indicatorsshow mixed results.
Insecurity, a weakened social contract,
and the absence of the State in remoteareas, and limited investment are key
bottlenecks for inclusive growth. Political instability following the two coupd’états in 2020 and 2021 has also become a significant growth constraint.
In September 2023, Burkina Faso, Mali,
and Niger formed the Alliance of Sahel States (AES), a security and military pact with political and economic
aims. On January 28, 2024, in a joint
communiqué, the three countries announced their ‘immediate’ withdrawal
from ECOWAS. According to the revised ECOWAS Treaty, a notification
period of one year is required toleave ECOWAS. These developments
have increased political and policy
uncertainty, including the timetablefor elections in Mali.

Recent developments
GDP growth stabilized at 3.5 percent in
2023, less than initial projections, due tolower food agricultural production, which
was impacted by insecurity and unfavorable weather conditions. The second major
contributor was the electricity crisis starting in August 2023 with shortages due to alarge accumulation of arrears to suppliers
disrupting manufacturing. Industrial output was also dampened by the effects ofthe 2022 unsuccessful cotton season on
ginning industries. The service sector remained resilient, supported by telecommunications and public services. On the
demand side, growth was supported bypublic and private consumption, in contrast to public investment and net exports,
which underperformed. The terms of trade
improved in 2023 as commodity prices ofenergy and food imports eased. This wasoffset by lower exports as cotton exports
declined 13.5 percent on the back of lower
production in 2022, and the recovery of import demand after the lifting of the 2022
ECOWAS sanctions. As a result, the current account deficit remained high at
6.8 percent of GDP.
After surging to a record high of 9.7 percent in 2022, inflation declined to 2.1 percent in 2023, due to strong 2022 agricultural production and the easing of international commodity prices. As a result, theextreme poverty rate has decreased by 0.8
percentage point to 20.2 percent in 2023.
However, the humanitarian situation remains serious, with over 350,000 internally

FIGURE 1 Mali / Real GDP growth, current account andfiscal balances

FIGURE 2 Mali / Actual and projected poverty rates and real
GDP per capita

Percent, percent of GDP
6

Poverty rate (%)

Real GDP per capita (constant LCU)

100

27000090

426000080

270250000

60

0

50

-2

24000040-423000030
20-6220000

10

-8
2018

2019

2020

2021

0

2022 2023e 2024p 2025p 2026p

Fiscal balanceReal GDP growth

2100002009 2011 2013 2015 2017 2019 2021 2023 2025

Current account balance

Sources: Malian government and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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displaced persons due to insecurity, in
addition to an estimated 715,000 people facing severe food insecurity as ofDecember 2023.
To counter inflation across WAEMU countries, the Central Bank of West African States(BCEAO) raised policy interest rates by a cumulative 150 basis points since mid-2022 to
3.5 percent for liquidity calls and 5.5 percent
for the marginal lending facility. However,inflation in the region (3.7 percent in 2023)
was still above the 1-3 percent target range
and foreign exchange reserves have been on
a downward trend, estimated at 3.5 monthsof imports at end-2023, down from
4.3 months at end-2022.
The fiscal deficit stabilized at 4.8 percent
of GDP in 2023, while public debt slightly
increased to 52.1 percent of GDP. Though
the risk of debt distress remains moderate,
there are increasing fiscal risks from theelectricity sector with contingent liabilities(arrears) of 4.6 percent of GDP. Tax revenues recovered in 2023, supported by digitalization reforms, and higher indirect collections, boosted by the recovery of tradeflows. Public wages (8.8 percent of GDP)and security spending (6.4 percent of GDP)

continued to increase and crowd out public investment (4.2 percent of GDP). The
fiscal deficit was financed predominantly
by the increasingly expensive regionalbond market, where Mali’s average yields
on 12-month treasuries reached 9.4 percent
in February 2024.

Outlook
Growth is projected to weaken slightly to
3.1 percent in 2024 and average 4 percent
over 2025-26 – below the long-term potential rate for the economy of 5 percent – reflecting the combined effects of the electricity crisis and the expected impacts of anorderly ECOWAS withdrawal: lower tradewith non-WAEMU ECOWAS states, higher
investors’ risk premia, and increased regional financing costs.
The fiscal deficit is expected to decline to 4.1
percent of GDP in 2024, before graduallyconverging towards the WAEMU ceiling of
3 percent by 2026, as the government consolidates in the face of high financing costs. The
current account deficit is expected to

TABLE 2 Mali / Macro poverty outlook indicators

gradually decline over 2025-26 with thecoming onstream of lithium production.
Due to the weak growth in GDP per capita,
particularly in agriculture and service sectors, the extreme poverty rate is expected
to decline only slightly - by 0.9 ppt over2023-2026 - and will result in nearly 76,500
additional extreme poor per year.
The outlook remains subject to significant
downside risks, including rising insecurity
from the exit of the 13,000 MINUSMA
peacekeeping force in 2023 and the endof the Algiers peace accord, a persistentelectricity crisis, climatic shocks, and thewithdrawal from ECOWAS. An unnegotiated ECOWAS withdrawal with disruptions to transport, transit and free movement of goods, services, capital, and labor
could exacerbate negative impacts due tospillovers onto WAEMU trade. The
BCEAO may need to continue monetary
tightening in 2024 to bring inflation undercontrol and in the context of increased
risks from the withdrawal of Niger, Mali,
and Burkina Faso from ECOWAS. A further increase in the cost of financing could
lead to Mali further cutting investment expenditure to reduce its borrowing needs.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.1
3.0
5.8
4.8
-1.0
14.1

2022
3.5
4.0
7.6
1.0
18.1
0.7

2023e
3.5
3.9
16.7
-3.6
-3.9
2.3

2024f
3.1
3.8
-0.2
4.7
2.8
3.9

2025f
3.5
3.9
0.8
4.5
4.3
4.3

2026f
4.5
4.1
-1.0
9.2
5.1
4.3

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.0
1.4
1.0
5.1

4.3
2.4
3.7
5.8

3.4
2.3
2.0
4.9

3.1
3.6
3.0
2.8

3.5
4.5
3.5
2.8

4.5
4.5
3.5
4.9

Inflation (consumer price index)

4.0

9.7

2.1

2.5

2.3

2.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-7.7
3.0

-7.0
2.6

-6.8
2.4

-6.0
3.0

-5.8
2.9

-4.8
2.7

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.9
22.0
50.4
-3.5

-4.8
19.8
51.8
-3.4

-4.8
20.8
52.1
-3.1

-4.1
20.8
52.6
-2.2

-3.2
21.9
52.8
-1.4

-2.9
20.5
53.4
-1.2

20.8
56.1
85.9

21.0
56.4
86.1

20.2
54.7
84.3

20.1
54.6
84.1

19.9
54.2
84.1

19.3
53.5
83.8

4.0
8.5

3.3
9.0

2.7
8.6

3.6
8.4

4.0
8.3

4.2
8.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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MAURITANIA
Table 1

Key conditions andchallenges
2023

Population, million

4.9GDP, current US$ billion

10.6

GDP per capita, current US$

2170.6

International poverty rate ($2.15)

a

5.4
a

25.8

a

68.0

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

32.0

School enrollment, primary (% gross)

b

86.7

b

64.4

Total GHG emissions (mtCO2e)

14.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2017 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2021).

Real GDP growth slowed in 2023 to 3.4
percent from 6.4 percent in 2022. Monetary policy tightening and lower international food and energy prices eased inflation and improved the current accountbalance. The fiscal deficit narrowed due tounder-executed capital spending. The
poverty rate (US$3.65-a-day) is expected
to slightly increase from 27.7 percent in
2022 to 27.9 percent in 2023. The medium-term outlook remains favorable albeit
subject to downside risks.

Owing to its wealth of natural resources, consisting of iron ore, gold,
crude oil, and copper, per capita
GDP tripled over the last two
decades to stand at USD 2,170.6 placing Mauritania among the World’s
Lower
Middle-Income
Countries.
Nevertheless, the economy confronts
structural challenges as underscoredby the slow post-pandemic recovery.
The heavy dependence on extractives, low capacity to implement
public investment projects, a challenging business environment, andhigh vulnerability to climate shocks
weigh on Mauritania’s growth anddevelopment prospects. The poorest
are exposed to high risk of food insecurity due to climate shocks on local
food production which contributes 20
percent of food consumption.
Overcoming these challenges will require greater reliance on the private
sectortostimulate
productivity
growth, increase job creation, andraise the income of the poor. Maintaining strong macroeconomic fundamentals will be key to creating andpreserving the fiscal space needed for
growth and climate-friendly investments. Strengthening the resilience toclimate shocks remains a priority thatwill involve policies and investment in
adaptation and mitigation.

FIGURE 1 Mauritania / Evolution of main macroeconomic
indicators
Percent
8

Poverty rate (%)

-2
-4

4

Economic growth is estimated at 3.4 percent in 2023 (0.7 percent in per capita
terms) down from 6.4 percent in 2022 (3.7
percent in per capita terms) reflecting asignificant contraction in fish production
on the supply side and lower public investment and fish exports on the demand side.
Inflation decreased driven by lower foodand oil prices, reaching 1.6 percent (y/y) in
December 2023, compared with 11 percent(y/y) in December 2022.
The US$3.65-a-day poverty rate is expected to slightly increase from 27.7 percent in
2022 to 27.9 percent in 2023 due to a decline in per capita agriculture growth (-2.7
percentage points (pp)) counterbalanced
by a decline in inflation (-4.6 pp). The number of poor is also expected to increaseby 44,000 people.
The fiscal balance recorded a deficit of 2.5
percent of GDP in 2023, compared with 3.7
percent of GDP in 2022. This improvement
was driven by a fall in capital expenditure
to 6.7 percent of GDP in 2023 from 11.3
percent of GDP in 2022, offsetting the decline in commodity revenues and higher
wages and compensation resulting fromthe public sector salary increase in January
2023. The debt-to-GDP ratio rose by 1.3 pp
to 48.6 percent of GDP in 2023, due to lower nominal growth and the depreciationof the exchange rate at the end of 2023.
The December 2023 WB/IMF Debt Sustainability Analysis suggests that external
debt remains sustainable, and the risk ofdebt distress moderate.

FIGURE 2 Mauritania / Actual and projected poverty rates
and real GDP per capita

Percent of GDP
0

6

Recent developments

Real GDP per capita (constant LCU)

80

90000

70

80000

60

70000

-6
-8

2

-2
-4
2021

2022

2023e

GDP growth (lhs)
Current account balance (rhs)

2024p

2025p

50000

40

-10

0

60000

50

40000

-12

30

-14

20

20000

-16

10

10000

-18

0

2026p

30000

0
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Primary fiscal balance (lhs)

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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The current account deficit (CAD) improved to 10 percent of GDP in 2023, reflecting an improved trade balance due tolower imports of capital goods, oil andfood in turn driven by a 17 percent and9 percent decrease in international pricesof oil and food, respectively. The Mauritanian Central Bank's foreign exchange reserves rose from 4.5 months of goods imports in 2022, to 6 months in 2023.
The central bank of Mauritania pursued
a restrictive monetary policy to containinflation in 2023. After raising the key
interest rate to 8 percent in December
2022, it increased the reserve requirement ratio from 6 to 8 percent in July
2023. It also conducted open market operations to dry up excess liquidity andlimit its impact on prices.

OutlookThe medium-term outlook is positive withgrowth projected at 3.8 percent in 2024 (1.1
percent in per capita terms) and to hoveraround 5.4 percent in 2025-2026. The
launch of gas production in the second halfof 2025 will boost growth while providing
sufficient fiscal margin to finance development projects and support social protection reforms. Higher private investments,
an improved net external position, andsustained private demand will also support growth. Average inflation will fall further and reach 2.5 percent in 2024, as external pressures ease, and stabilize around 2
percent in 2025 and 2026.
The US$3.65-a-day poverty rate is expected to remain largely unchanged at 28.3
percent in 2024-2025 and to decline to 25.9
percent in 2026 largely due to low growthin agriculture and declining food inflation.
Low inflation and strong agriculture performance in 2026 are expected to lead to a
decline in the number of poor by 125,000
people from 2025 to 2026.
The CAD should improve, reaching 8.5
percent of GDP in 2024 and average 5.5
percent of GDP in 2025-2026, driven by gas
exports, lower imports in the extractive industry, and lower import prices. FDI
linked to the extractive industry, andTABLE 2 Mauritania / Macro poverty outlook indicators

donors, are expected to remain the main
sources of external financing.
The fiscal deficit should decrease to 2 percent of GDP in 2024, supported by lower
current transfers, and higher tax revenues.
In 2026, the fiscal balance is projected toturn into a surplus of 0.1 percent of GDP
with gas revenue bringing about 0.5 percent of GDP of yearly additional fiscal revenue. Debt should gradually decline to46.3 percent of GDP in 2026.
Risks to the outlook remain elevated. A
slowdown in Foreign Direct Investment
inflows due to a delay in the second andthird phases of the gas extraction project and the tightening of global financing
conditions would weigh on medium-term
growth, fiscal and external prospects.
Mauritania is exposed to various climatic
shocks such as drought and floods, which
adversely affect human capital, householdincomes, and agricultural production. Regional insecurity in the Sahel remains arisk. Presidential elections scheduled forJune 2024 could exacerbate spending
pressures, leading to a deterioration in
the fiscal situation.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
0.7
3.4
26.8
12.1
-12.9
-3.3

2022
6.4
2.7
22.3
-7.3
39.9
15.8

2023e
3.4
2.5
8.3
-4.6
3.0
-0.5

2024f
3.8
2.6
7.3
5.9
3.6
4.0

2025f
4.5
2.7
6.0
3.1
6.7
3.9

2026f
6.3
2.8
4.7
3.3
10.1
3.6

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

0.0
-2.9
-11.5
11.0

8.0
12.7
12.0
3.1

3.4
1.2
6.1
2.6

3.8
2.8
6.3
2.5

4.5
2.0
7.7
3.3

6.3
5.5
8.9
4.6

Inflation (consumer price index)

3.6

9.6

5.0

2.5

2.0

2.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-8.5
11.5

-16.6
14.3

-10.0
7.4

-8.5
5.0

-6.7
2.7

-4.3
2.5

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

2.3
23.0
52.4
3.1

-3.7
24.1
47.3
-2.9

-2.5
22.1
48.6
-1.5

-2.0
22.6
47.7
-1.0

-1.4
23.0
47.5
-0.5

0.1
23.5
46.3
1.0

6.3
27.3
69.0

5.9
27.7
70.1

5.7
27.9
70.5

5.8
28.4
71.1

5.8
28.3
71.1

5.3
25.9
69.0

2.8
31.3

2.9
31.6

3.2
32.2

3.2
32.8

3.4
33.7

0.0
33.7

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2019-EPCV. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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MAURITIUS

Key conditions andchallenges

Table 1

2023

Population, million

1.3

GDP, current US$ billion

14.8

GDP per capita, current US$

11665.2
a

1.8

a

13.5

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

36.8

School enrollment, primary (% gross)

b

102.9

b

73.7

Total GHG emissions (mtCO2e)7.6Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2017 PPPs.
b/ Most recent WDI value (2021).

Mauritius sustained strong growth ofnearly 6 percent in 2023, supported by
tourism and aggregated demand, particularly household consumption and investment. Medium-term growth is expected
to be supported by public infrastructure,social spending, and residential investments. The poverty rate is projected to
decline from ten percent in 2023 to seven percent by 2026. However, the outlook faces substantial downside risks,
including fiscal pressures related toelections, weather shocks, and a weakerglobal economic outlook.

Mauritius has experienced a remarkable
growth trajectory. The economy transitioned from a low-income monocrop producer of sugar cane to an upper-middleincome investment and tourism hub. Per
capita GDP surged from US$260 in 1968 to
US$9,063 in 2021. After it briefly reachedhigh-income status in 2020, the severe 14.5
percent contraction in real GDP caused by
the COVID-19 pandemic pushed the country back into the upper-middle-income category. Yet, Mauritius has demonstrated
resilience, recovering strongly after the
pandemic and weathering external
shocks well, and is on track to return tohigh-income status.
However, addressing structural challenges
and macroeconomic vulnerabilities isneeded for Mauritius to achieve and sustain high-income status. Labor and skills
shortages have contributed to declines inmanufacturing export competitivenessand constrained private sector growth anddiversification. Reliance on imported fossil
fuels, as well as high exposure to climate
shocks, are key sources of vulnerability.
An aging population and social spending
commitments limit fiscal space to support
growth and implement countercyclicalpolicies. Poverty (upper-middle-income
country threshold of US$6.85 a day, 2017
PPP) fell from 19 percent to 11 percent between 2012 and 2019. However, given thedramatic contraction of GDP in 2020,

poverty is projected to have increased byover 5 percentage points (reaching 16 percent) and to have retreated to around nine
percent by 2024.
Increasing productivity requires prioritizing skills availability and development,
improving labor market institutions, andfostering women’s participation. Safeguarding the integrity and trust of thecountry’s financial services is crucial forcontinuing to attract foreign investments.
Additional efforts are needed to further
bolster macroeconomic resilience, including rebuilding fiscal buffers, increasing
revenue, improving efficiency in social
spending, and improving quality in education and innovation. Policies tostrengthen resilience against natural hazards and climate change are fundamental
to supporting sustained growth.

Recent developments
Real GDP grew by an estimated 6.8 percent in 2023, supported by a strong rebound in tourism, construction activities, and financial services. Gross fixed
capital formation increased by 23 percent in 2023Q3 (yoy), supported by social housing and infrastructure programs. Meanwhile, consumption spending grew modestly by 2.2 percent due
to a lower government wage bill.
The labor market has recovered significantly, with the unemployment rate declining to 6.3 percent in Q3, below the
pre-pandemic level. To meet the high demand for labor and skilled professionals,

FIGURE 1 Mauritius / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 Mauritius / Actual and projected poverty rates
and real GDP per capita

Percent
12

Poverty rate (%)

Real GDP per capita (constant LCU)

25

500000450000820400000350000415300000025000010-4150000Agriculture
Industry
Services
Gross value added at basic prices-8-122000005100000
50000

0

0
2012

-16

2014

2016

2018

2020

Lower middle-income pov. rate

2019

2020

2021

2022

2023e

2024f

2025f

2026f

Real GDP pc

Source: World Bank estimates.

Source: World Bank. Notes: see Table 2.

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2022

2024

2026

Upper middle-income pov. ratethe government has relaxed rules forhiring foreign workers.
Lower commodity prices, higher agriculture and fisheries exports, a higher net surplus in the service, and net income flowfrom abroad improved the external position. Along with the net direct investment
flow, these developments helped maintainadequate levels of gross official international reserves, with an import coverage of
11 months as of December 2023.
Headline inflation fell from 11.8 percent
in January 2023 to 5.2 percent in January2024, primarily because of lower imported
prices. The import price index declined by
5.5 percent in 2023Q3 compared with thesame period in 2022 and the Bank of Mauritius (BOM) intervened in the FX market
to contain the rupee’s depreciation. However, the monetary policy stance is generally accommodative and underpinned by apolicy rate that has been unchanged since
December 2022 and added by domestic investments of the Mauritius Investment
Corporation (MIC), a sovereign wealthfund of the BOM.
Current government expenditures increased by 12.6 percent in the first halfof FY23/24 (H1), driven by higher interest payments, subsidies, and social
spending. Revenue increased by 11 percent, driven by corporate income tax and

VAT revenues. As a result, the gross operating deficit in H1 widened to 3.6 percent
of GDP from 3.2 percent during the same
period in 2022. Financing needs were covered by domestic and external borrowing
as the new BOM Act prohibits direct transfers to the budget. Public debt decreased
from 91 percent of GDP in 2020-21 to an
estimated 80 percent in 2023, driven bystrong GDP growth and the transfer of Air
Mauritius debt to the MIC.

OutlookReal GDP growth is expected to moderate
to 4.7 percent in 2024, reflecting the end of
the post-pandemic recovery and levelingoff in international travels. Public investments in infrastructure, residential constructions, and tourism are expected to drive growth this year. Average inflation is
projected between 4.7 and 5.2 percent in
the medium term, driven by stable commodity prices and a cooling economy.
Poverty is projected to fall to about sevenpercent in 2026.
Lower commodity prices, steady tourist
arrivals, and earnings repatriation are likely to keep the current account deficit below
6 percent of GDP until 2025, lower than

TABLE 2 Mauritius / Macro poverty outlook indicators

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services(annual percent change unless indicated otherwise)

a

2021
3.4
3.0
-2.2
14.0
11.5
7.3

2022
8.9
3.3
6.4
7.8
40.2
10.2

2023e
6.8
2.0
-1.1
9.9
1.7
7.6

2024f
4.7
2.6
1.2
14.4
1.6
1.2

2025f
4.0
2.5
-0.4
10.3
1.6
0.7

2026f
3.3
1.7
1.8
8.1
1.5
0.7

4.1
7.3
10.9
2.3

9.4
5.5
6.8
10.3

6.8
0.8
2.6
8.2

4.7
1.5
2.1
5.4

4.0
1.5
2.1
4.5

3.4
1.5
2.1
3.7

Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (consumer price index)
Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)
Fiscal balance (% of GDP)
Revenues (% of GDP)the 11 percent recorded between 2020 and
2022. High foreign exchange demand forimports could put additional pressure on
international reserves, which are projected
to decline to eight months of import coverage over the medium term as the BOM
is expected to continue to intervene in theforeign exchange market.
Higher universal pension spending andspending to mitigate the impact of Cyclone
Belal and the dengue outbreak are expected to contribute to a widening in the primary deficit to 3.3 percent of GDP in FY23/
24 (from 2 percent in FY22/23) and further
to 3.6 percent in FY24/25. Tax revenue collection is expected to increase moderately
over the medium term along with moderating GDP growth. Public debt is expected
to remain at about 80 percent of GDP overthe medium term, but a gradual fiscal consolidation, including a pension reform, isneeded to stabilize it.
Risks to the outlook are mostly to thedownside. Higher global freight costs
and weather shocks from an intense cyclone season pose a risk for inflation. The
softening of global economic growth also
represents a downside risk for merchandise exports and tourist arrivals. On theupside, higher social spending and sustained direct investment flows may further
support growth.

bbDebt (% of GDP)b
Primary balance (% of GDP)c,dLower middle-income poverty rate ($3.65 in 2017 PPP)c,dUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

4.0

10.8

7.1

5.2

4.7

4.2

-11.9
21.1

-8.6
-8.2

-4.8
-3.2

-3.8
-4.6

-4.4
-2.2

-4.9
-2.9

-10.6
23.3
91.9
-6.9

-5.1
25.0
85.9
-2.5

-5.8
22.8
80.9
-2.9

-6.5
24.5
80.6
-3.2

-5.4
24.8
81.6
-1.9

-5.2
25.1
81.5
-1.8

2.1
15.3

1.7
12.7

1.3
10.5

1.1
9.2

0.9
8.1

0.7
7.4

7.4
60.7

6.9
62.2

3.3
62.3

2.5
62.2

2.3
62.1

2.3
62.0

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Historical demand-side data is being revised due to a consistency problem.
b/ Fiscal balances are reported in fiscal years (July 1st - June30th).
c/ Calculations based on 2017-HBS. Actual data: 2017. Nowcast: 2018-2023. Forecasts are from 2024 to 2026.
d/ Projection using neutral distribution (2017) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.
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MOZAMBIQUE
Table 1

Key conditions andchallenges

2023

Population, million

33.9

GDP, current US$ billion

21.4

GDP per capita, current US$

632.5

International poverty rate ($2.15)

a

74.5
a

88.6

a

96.1

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

50.5

School enrollment, primary (% gross)

b

121.2

b

59.3

Total GHG emissions (mtCO2e)

106.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2017 PPPs.
b/ Most recent WDI value (2021).

Economic recovery gained momentum in
2023, with real GDP growth reaching 5
percent, largely driven by liquefied natural gas (LNG) production. The country is
grappling with substantial fiscal pressures arising from the high public sector
wage bill and increasing debt service cost.
Growth is projected to remain at 5 percent over the medium term, while poverty
is projected to decline from 73.4 percent
in 2023 to 70.9 percent in 2026. Downside risks include volatility in global markets, natural disasters, and the conflict innorthern Mozambique.

Mozambique faces substantial development challenges, including limited structural transformation and widespread poverty,
which affected roughly 74.4 percent of the
population in 2019 [when measured by the
US$2.15 per day poverty line (2017 PPP)].
Most of the labor force is employed in lowproductivity agriculture and services sectors. The main drivers of growth are capitalintensive megaprojects, with limited
spillovers to the rest of the economy.
Fiscal space is significantly constrained.
With over 90 percent of tax revenues in
2021-22 absorbed by the wage bill anddebt-service costs, the country allocates
only limited resources to public investment and social spending. Additional constraints to financing Mozambique’s large
development needs include lack of accessto international financial markets, highrisk of sovereign debt distress, a shallow
domestic financial market, and lending
rates that are among the highest in SubSaharan Africa. These challenges are compounded by fragility and conflict and highvulnerability to climate shocks.
Mozambique has the opportunity to implement reforms to broaden its economic baseand job creation sources, with a focus on sustainable growth. The private sector’s growth
could be fostered by improving access tocapital, and adequate infrastructure, and byaddressing regulatory challenges. Strengthening fiscal management and governanceand facilitating greater private sector participation in labor-intensive sectors such as
agriculture and services are crucial. Considering the fiscal constraints, it is criticalto enhance spending efficiency and debt
management practices to improve fiscal
discipline and establish credibility within
financial markets. The benefits from future LNG revenues can be maximized
through a robust fiscal framework, including the sound use of the recently established Sovereign Wealth Fund, to ensure effective resource management andpromote long-term economic resilience.

Recent developments
The economy grew by 5 percent in 2023,
primarily driven by the start of LNG production at the Coral South offshore facility.
Strong growth in agriculture and services,
particularly transport, also contributed tothe expansion of the economy, offsetting
the impact of lower manufacturing andconstruction activity. Inflation, which had
reached a five-year high of 9.8 percent in
2022, moderated to 7.1 percent in 2023.
This moderation supported a 3-percentage-point drop in poverty to 73.4 percent
in 2023. Despite the 100-basis-point cut inthe monetary policy rate to 16.3 percent inJanuary 2024, the overall monetary policy
stance remains tight, with high statutory
reserves (39 percent).
Fiscal pressures remain elevated, as measures to reduce the wage bill only had alimited impact in 2023. The primary deficit
improved from 2 percent of GDP in 2022 to

FIGURE 1 Mozambique / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 Mozambique / Actual and projected poverty
rates and real GDP per capita

Percent, percentage points
12

Poverty rate (%)

10

90

8

80

6

70

4

60

2

50

0

40

-2

30

-4

20

-6

10

2014

2016

2018

Agriculture
Private services
GDP

Real GDP per capita (constant LCU)

100

2020

2022

Extractives
Public Services

2024f

2026f

30000
25000
20000
15000
10000
5000

0

0
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Manufacturing
Tax

Source: World Bank estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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an estimated 0.2 percent in 2023. Total expenditures in 2023Q3 surged by 14 percent
due to pressures from the wage bill, interest payments, and election-related spending. Total revenue growth was low at 6
percent in the first three quarters of 2023
because of lower value-added tax (VAT)
collection after the VAT rate was cut to16 percent from 17 percent previously.
Public debt declined from 95 percent of
GDP in 2022 to an estimated 91 percent in 2023, even though domestic debt
stood at 27 percent of GDP in 2023, up
from 22 percent in 2020, indicating rising financing needs amid limited accessto international capital markets.
The current account deficit narrowed from
US$5.8 billion in the first three quarters of2022 to US$1.1 billion over the same period
in 2023 due to a combination of lower imports for megaprojects, lower fuel prices,
and an increase in LNG exports. The
deficit was primarily financed throughtrade credits and foreign direct investments in the extractive sector, which totaled US$1.5 billion by September 2023. As
a result, gross international reserves increased from US$2.8 billion in December
2022 to US$3.2 billion in November 2023,

covering four months of imports if
megaprojects imports are excluded.

OutlookGDP growth is projected to average 5 percent over 2024-26, supported by increasing
offshore LNG production, the resumptionof the Total-led LNG project, and dynamism in agriculture and services. The
stabilization of global commodity prices
could help contain inflation, enabling further easing of monetary policy. Growth isexpected to support a decline in the national poverty rate, from 73.4 percent in 2023
to 70.9 percent by 2026. However, the absolute number of Mozambicans living inpoverty is projected to increase by 1 million people during the same period, given
the fast population growth.
The fiscal balance is projected to decline
from 3.4 percent of GDP in 2023 to an average of 1.6 percent over 2024-26, partly
driven by higher revenues linked to LNG
revenue. Expenditure is projected to decrease from 31.3 percent of GDP in 2023
to 26.5 percent in 2026 due to consolidation

TABLE 2 Mozambique / Macro poverty outlook indicators

measures to reduce the wage bill. These include limiting hiring in non-priority sectors, reducing the 13th-month salarybonus, and auditing the public sector
workforce. Public debt is projected to stabilize at about 92 percent of GDP in themedium term, but Mozambique is expected to remain at high risk of debt distress inthe short term.
The current account deficit is projected
to widen sharply, averaging 44.1 percent
of GDP over 2024-26, mainly driven by
LNG-related imports. Financing is projected to come from trade credits and foreign direct investment. Gross reserves are
expected to remain at adequate levels of
about US$3.5 billion, which is equivalent
to nearly four months of imports whenexcluding megaprojects.
The outlook is subject to substantial
downside risks from extreme climate
events, waning commitment to fiscal reforms in the run-up to elections, and uncertainty around the security situation in
the north. On the fiscal side, the highpublic sector wage bill and increasing
debt service will continue to limit the fiscal
space, increasing the risks of refinancing
and debt rollover.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.3
17.3
-7.8
32.5
23.8
37.2

2022
4.2
3.0
17.2
-6.4
10.2
1.9

2023e
5.0
3.1
-25.4
10.1
19.5
3.3

2024f
5.0
9.8
-3.5
4.9
3.0
6.0

2025f
5.0
7.5
-8.1
8.4
2.0
5.0

2026f
4.4
6.1
-8.1
8.6
2.0
5.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.2
3.7
1.6
1.6

4.2
4.4
3.8
4.3

5.0
6.0
7.6
3.4

5.0
4.0
8.2
4.2

5.0
4.0
8.1
4.2

4.4
4.0
8.1
3.0

Inflation (consumer price index)

6.4

10.3

7.1

5.7

5.6

5.3

-22.3
31.6

-32.9
10.3

-16.0
4.4

-38.4
13.6

-42.0
14.5

-44.1
12.7

-4.6
27.4
105.0
-1.9

-4.9
27.4
95.2
-2.0

-3.4
27.9
91.9
-0.2

-2.3
26.4
94.4
0.6

-1.6
25.8
92.0
1.1

-0.8
25.7
81.6
1.5

76.1
89.3
96.5

75.6
89.1
96.4

73.3
88.1
95.9

72.5
87.7
95.7

71.6
87.3
95.6

70.9
87.0
95.4

0.8
8.1

0.7
8.4

0.7
8.5

0.9
9.0

1.0
9.5

0.9
9.9

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)
Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)a

Primary balance (% of GDP)ab,cInternational poverty rate ($2.15 in 2017 PPP)b,cLower middle-income poverty rate ($3.65 in 2017 PPP)b,cUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Figure includes once-off capital gains revenues in 2017, estimated at 2.7 percent of GDP.
b/ Calculations based on 2019-IOF. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026.
c/ Projection using neutral distribution (2019) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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Key conditions andchallenges

Table 1

2023

Population, milliona2.6

GDP, current US$ billion

12.4

GDP per capita, current US$

4740.3

International poverty rate ($2.15)

b

15.6
b

33.3

b

57.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

b

59.1

School enrollment, primary (% gross)

c

133.0

c

59.3

Total GHG emissions (mtCO2e)

25.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Latest official estimates. Preliminary results from the2023 census suggest a population of 3.0 million vs the 2.6
million used here.
b/ Most recent value (2015), 2017 PPPs.
c/ WDI for School enrollment (2022); Life expectancy(2021).

Namibia’s economy grew by 4.2 percent
in 2023. GDP growth is expected to remain above 3 percent over the medium
term, subject to high uncertainty aroundthe possible implementation of large-scaleenergy projects. Fiscal policy over the
medium term is expected to be centeredaround maintaining primary budget surpluses to support the stabilization of the
public debt ratio. Poverty (at the $2.15line) is expected to improve but remainhigh at 17.2 percent in 2024.

Since 1990, Namibia has made significant
progress on economic and social indicators. Over the two decades to 2015,
GDP growth averaged 4.5 percent, supported by sound macroeconomic policies
and the commodity super cycle, whichspurred mining investment. The country
attained middle-income status in 2009,
and the poverty rate declined. Natural resource revenues allowed for an increasein public spending, including on social
programs to support households, and on
increased access to public services, including education and health. Despite
this progress, many social indicators continue to lag peers, and there are significant spatial and gender disparities. Although demand for services has markedly increased, job creation outside the extractive sectors has been insufficient.
Consequently, unemployment has remained stubbornly high, exacerbated byskills shortages. Most of the working
population is engaged in low-skilled
work in the informal sector. The country
remains among the most unequal in theworld (Gini index at 59.1 in 2015).
The immediate years leading up to the
COVID-19 pandemic in 2020 were marked
by a recession, driven by the end of thecommodity cycle, the completion of major
investment projects, a severe drought, andfiscal consolidation. This underscored theneed for a structural shift from the current

growth model based on extractives and alarge state presence in the economy, which
limits competition, export diversification,and creates inefficiencies.
While the public sector continues to facefiscal constraints, given high public debt
levels, there are opportunities to improve
spending efficiency. Recent developmentsin the mineral and energy sector provide
Namibia with opportunities to develop
new drivers of growth and employment
through economic diversification and value chain development. The realization ofthese opportunities hinges on structural reforms that reduce the costs of doing business and promote international
trade and investment.

Recent developments
Namibia’s recent economic performance
was stronger than expected. The economy grew by 4.2 percent in 2023, driven
by the mining sector, including investments in oil exploration. The expansion
was also generated by sustained growth
in private consumption. The economy
has recovered its pre-pandemic level, butmany key sectors, including job-rich construction and financial services, continue
to lag. Due to stronger GDP growth inboth 2022 and 2023, poverty is estimatedto have improved but remains high at 17.8
percent based on the US$2.15 per day international poverty line (IPL; 2017 PPP).
Investments in the extractive industries
has shaped not only Namibia’s recent
growth trajectory but also the balance of

FIGURE 1 Namibia / Mining activity and real GDP growth

FIGURE 2 Namibia / Actual and projected poverty rates andreal GDP per capita

Real index (2018Q1 = 100)
140

Poverty rate (%)

125

Real GDP per capita (constant LCU)

80

70000

70

60000

60
110

50000

50

40000

40

95

30000

30
80

20000

20

10000

10

65

0
50
2018Q1 2018Q4 2019Q3 2020Q2 2021Q1 2021Q4 2022Q3 2023Q2
Real GDP
MiningNon-mining02009 2011 2013 2015 2017 2019 2021 2023 2025

Sources: National Statistics Agency and World Bank staff estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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payments. Despite strong export growth,
the current account deficit remained large
in 2023 as services imports rose sharply.
The wide current account deficit was sufficiently financed by rising foreign direct
investment inflows. To facilitate the development of a large-scale green hydrogen industry, the government is developing aroadmap for the sector that aims to allow
the domestic economy to benefit from thedevelopment of related value chains.
The overall fiscal deficit balance improved from 5.2 percent to 3.7 percent
of GDP between 2022 and 2023 due tothe GDP recovery and the significant
rebound in SACU revenues, which increased by 72 percent. These additional
revenues were largely absorbed intohigher expenditure commitments, including higher interest payments,
drought relief, and one-off costs related
to the population census.
Monetary policy remained restrictive,
broadly in line with the stance of theSouth African Reserve Bank. Credit
growth remains subdued, and the current stance helped to curb headline inflation, which decreased to 5.3 percent in
December 2023.

OutlookNamibia’s economic growth is projected tomoderate to about 3-3.8 percent per year
over 2024-26. This projection is subject tohigh uncertainty as the economy could be
impacted by the speed of implementationof several large-scale projects in the energy
and mining sectors. If these projects moveinto the construction phase during this period, the growth rate of the economy could
substantially accelerate through a combination of foreign direct investment inflows
and spillovers to the local economy.
Growth in the non-mineral economy is expected to gain traction, especially in sectors that have been severely set back by
the pandemic, including tourism. Household consumption growth is expected tostrengthen, benefiting from improved income growth and lower inflation, which is
projected to reduce to 5.0 percent in 2024.
The poverty rate under the IPL is projected
to decrease to 17.2 percent in 2024.
After the stimulus, driven by the increase
in SACU revenue in FY2023/24, budget
expenditure growth is expected to slow

TABLE 2 Namibia / Macro poverty outlook indicatorsin the medium term. However, fiscal consolidation is expected to be slower thanbudgeted for in the medium term, impacted by increased expenditure commitments and lower SACU revenues from2025. The large public sector wage billis expected to continue to constrain fiscal
space. Given high debt levels and highinterest payment costs, fiscal policy
should remain prudent to ensure a sustained decline in the debt-to-GDP ratio
over the medium term. The budget plan
to retire two-thirds of the US$750 million
Eurobond maturity in October 2025, using accumulated savings from the sinking
fund, should support a faster reductionin the debt-to-GDP ratio.
Namibia’s economic outlook is favorable,
but there are significant downside risks on
the horizon. Dependent on the attainmentof final investment decisions, Namibia’s
economy could experience a sizable investment boost in the mining and energy sectors over the coming years, which would
redefine its growth trajectory. However,
the recovery faces major downside risks
from global geopolitical tensions, which
could undermine global economic activity,and climate shocks.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.6
14.6
1.3
18.0
-2.1
20.2

2022
5.3
9.5
0.6
10.0
22.9
23.0

2023e
4.2
4.7
1.0
69.3
14.1
22.7

2024f
3.4
4.8
1.3
8.3
4.1
6.1

2025f
3.6
5.2
0.7
9.6
4.4
6.8

2026f
3.8
5.3
0.6
9.6
4.7
6.8

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.5
1.6
0.5
1.9

4.6
1.7
11.3
2.2

4.0
-3.4
9.2
2.7

3.4
0.5
6.6
2.2

3.6
2.0
6.7
2.2

3.8
2.0
6.9
2.3

Inflation (consumer price index)

3.6

6.1

5.9

5.0

4.7

4.6

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-11.2
6.7

-12.9
8.4

-11.1
17.9

-10.4
9.4

-10.2
9.4

-9.9
9.4

Fiscal balance (% of GDP)
Revenues (% of GDP)

-8.5
29.9
73.1
-4.2

-5.2
30.9
72.8
-0.7

-3.7
33.2
70.2
1.4

-3.9
32.4
67.9
1.0

-4.6
29.1
66.7
0.1

-4.3
28.4
64.9
0.4

19.7
38.0
62.3

18.3
36.6
60.8

17.3
35.6
59.7

17.0
35.1
59.2

16.5
34.7
58.6

16.1
33.9
58.0

0.5
14.9

2.1
15.1

1.1
15.8

2.4
15.9

3.2
16.2

3.4
16.5

a

Debt (% of GDP)
Primary balance (% of GDP)b,cInternational poverty rate ($2.15 in 2017 PPP)b,cLower middle-income poverty rate ($3.65 in 2017 PPP)b,cUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Refers to Public and Publicly Guaranteed debt.
b/ Calculations based on 2015-NHIES. Actual data: 2015. Nowcast: 2016-2023. Forecasts are from 2024 to 2026.
c/ Projection using neutral distribution (2015) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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NIGERKey conditions andchallenges

Table 1

2023

Population, million

27.2

GDP, current US$ billion

16.6

GDP per capita, current US$

611.3

International poverty rate ($2.15)

a

50.6
a

83.1

a

96.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

32.9

School enrollment, primary (% gross)

b

64.8

b

61.6

Total GHG emissions (mtCO2e)52.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ Most recent WDI value (2021).

The political crisis: the coup d’état, followed by sanctions and a severe reduction
in financing, together with weak agriculture production, is estimated to have lowered GDP growth in 2023 to 1.2 percent(-2.7 percent per capita) and increased theextreme poverty rate to 52 percent. With
sanctions lifted, growth could rebound to
6.9 percent, boosted by large-scale oil exports. Significant downside risks are theannounced ECOWAS withdrawal, financing conditions and climatic shocks.

Niger’s economy is agriculture dependentand highly vulnerable to climate shocks,
leading to volatile growth. With limited improvements in productivity and high population growth, over half the population lives
in extreme poverty, aggravated by genderdisparities, with some of the weakest humancapital development indicators globally.
With the completion of the Niger-Beninpipeline, oil production is expected to risefrom 20,000 to 110,000 barrels per day by2025, increasing the importance of the oil
sector in exports, revenues, and GDP.
Since 2011, Niger had been a source of political stability in the Sahel, benefiting froma significant increase in international development assistance and investment in recent years. This changed with the military
coup on July 26, 2023, which led to heavy
ECOWAS and WAEMU commercial and financial sanctions and border closures lasting nearly 7 months, and a pause in development assistance. In September 2023,
Burkina Faso, Mali, and Niger formed the"Alliance of Sahel States” (AES) - a security
and military pact with political and economic aims. On January 28, 2024, in a joint communiqué, the three countries announced
their ‘immediate’ withdrawal from ECOWAS. According to the revised ECOWAS
Treaty, a notification period of one year is required to leave ECOWAS. These developments have further increased political andpolicy uncertainty.

Recent developments
Prior to the crisis, GDP growth had been
projected at 6.9 percent in 2023 and to rise
to 12 percent in 2024, on the back of largescale oil exports through the pipeline starting by end 2023. However, the sanctions
and border closures delayed this start.
Government spending fell due to thefreezing of government assets, the lossof access to the WAEMU regional bondmarket, and a significant reduction in external financing. Private investment also
fell sharply due to the uncertainty anda liquidity crisis in the banking sector,
brought on by the financial sanctions.
Formal trade volumes fell - exports by
8.1 percent and imports by 12 percent.
On the supply side, manufacturing, construction, and trade-related services wereheavily impacted and total agricultural
production fell due to inadequate rainfall,pests, and insecurity. That GDP growth
remained positive demonstrates resilience, for example, the continuation of
public-sector salary payments and theramping up of local electricity production
in response to the cut-off of electricity
imports from Nigeria.
The annual average inflation remained stable at 3.7 percent in 2023, after being subdued in H1-2023 (average 1.2 percent),
then rising sharply in H2-2023 (average 6.3
percent) due to food inflation caused byimport disruptions.
The 2023 budget was revised, cutting
capital expenditures, and reducing the
deficit to 3.9 percent of GDP (compared

FIGURE 1 Niger / Real GDP growth and contributions to real
GDP growth

FIGURE 2 Niger / Actual and projected poverty rates andreal GDP per capita

Percent, percentage points
20

Poverty rate (%)

1590Real GDP per capita (constant LCU)

100

35000030000080

1070250000560200000

0

50

-5

40

15000030

100000

-10

20

-15

10

2021

2022

Gov. cons.
Inventories
Statistical disc.

2023

2024

Exports
Private cons.
GDP

2025

2026

50000

0

0
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

GFCF
Imports

Source: World Bank estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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to 6.8 percent in 2022). Due to the financial
sanctions, Niger missed several debt repayments to government bond holders
and international financial institutions. According to UEMOA-Titres, CFAF 314 billion (USD$512 million or 3.1 percent ofGDP) is owed to bondholders as of February 19, 2024. Moody’s has downgraded
Niger's credit rating from B3 to Caa3. Public debt is expected to reach 54.5 percent ofGDP, including arrears.
The decline in overall and agriculture GDP
per capita and rise in food prices is expected to increase the poverty rate by 2
percentage points to 52.0 percent in 2023.
2.3 million (8.9 percent of the population)
were estimated to be food insecure in
Q4-2023, 13 percent higher than Q4 2022,
due to food inflation and pockets of fooddeficits. There are also estimated around
300,000 internally displaced persons due
to insecurity and an equal number ofrefugees from Nigeria, Mali, and Burkina
Faso. The crisis and border closures have
led to severe disruptions in the delivery ofhumanitarian aid.

OutlookWith sanctions lifted in February 2024,
growth could rebound to 6.9 percent (2.9
percent per capita) in 2024 and average 4.5
percent over 2025-26, boosted by large-scaleoil exports, while the non-oil industry andservice sectors face a challenging recovery.
Growth prospects are weakened by the expected impacts of an orderly ECOWAS
withdrawal: lower non-WAEMU ECOWAS
trade, namely with Nigeria, higher investors’ risk premia, and increased regional
financing costs. The fiscal sector will remain
constrained by financing, as its resumption
depends on the clearance of arrears and reestablishing engagements. Inflation is expected to stay above 3 percent 2024-26 as theresumption of large-scale imports from theregion is counterbalanced by higher import costs from exiting the ECOWAS free
trade area. With the onset of oil exports,
the current account deficit is projected tonarrow to 8.4 percent of GDP.

TABLE 2 Niger / Macro poverty outlook indicators

The extreme poverty rate is projected toslightly decrease by 0.8 ppt to 51.2 percent
by 2026 assuming solid growth in service
and agriculture sectors and policies thatuses oil revenues for the population. The
number of absolute poor is projected toreach nearly 15.6 million people by 2026.
The outlook remains subject to significant
downside risks, including a deteriorationin the security situation, terms of trade
shocks, climatic shocks, difficult financing
conditions, and the withdrawal fromECOWAS. An unnegotiated ECOWAS
withdrawal with disruptions to transport,
transit and free movement of goods, services, capital, and labor could exacerbate
negative impacts due to spillovers onto
WAEMU trade. The BCEAO may need tocontinue monetary tightening in 2024 tobring inflation under control and in thecontext of increased risks from the withdrawal of Niger, Mali, and Burkina Faso
from ECOWAS. A further increase in thecost of financing on the regional market
could lead to Niger cutting investment expenditure to reduce its borrowing needs.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.4
-0.2
9.8
7.7
6.7
6.9

2022
11.5
7.0
-1.2
21.1
14.4
6.5

2023e
1.2
3.5
-11.1
-10.9
-8.1
-12.0

2024f
6.9
3.8
2.2
3.1
82.5
22.5

2025f
4.8
4.4
4.1
4.0
9.8
5.5

2026f
4.3
4.1
3.3
3.7
8.7
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.0
-5.1
4.1
5.4

11.6
27.0
-0.9
4.9

1.2
-1.2
3.9
2.5

6.9
6.5
14.9
2.8

4.7
5.5
5.6
3.3

4.3
5.5
3.4
3.4

Inflation (consumer price index)

2.9

3.9

3.7

3.5

3.7

3.5

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-7.8
2.1

-9.8
3.9

-9.4
3.2

-8.4
1.7

-6.3
2.0

-4.5
-2.1

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-3.4
18.2
51.3
-2.2

-6.8
14.9
51.7
-5.6

-3.9
10.0
54.5
-2.9

-2.4
11.0
52.6
-1.8

-2.6
11.8
50.9
-2.1

-2.7
12.0
49.3
-2.3

50.6
83.1
96.3

49.9
82.6
96.0

52.0
83.1
96.0

50.9
82.7
95.7

51.1
82.8
95.7

51.2
82.9
95.8

4.7
7.1

4.8
7.5

3.9
7.3

4.7
7.7

4.8
8.0

4.6
8.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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NIGERIA

Key conditions andchallenges

Table 1

2023

Population, million

223.8

GDP, current US$ billion

362.8

GDP per capita, current US$

1621.1

International poverty rate ($2.15)

aNigeria’s economic growth has been insufficient to raise living standards, weighed
down by weak macroeconomic fundamentals and several structural constraints. Overreliance on the oil sector for fiscal revenues,
exports, and FX inflows led macro stability
to erode with the sector’s deteriorating performance in recent years. Low revenues—including due to a costly petrol subsidy, low tax rates, and weak tax administration—have limited state capacity and public
service delivery. Inflation has remained
high and escalating on the back of a relatively loose monetary policy and exchange rate
depreciation. Structural factors holdingback the country’s growth potential include
lack of adequate energy and transport infrastructure, high domestic trade costs and foreign trade protectionism, widespread insecurity, weak institutions, and low levels ofhuman capital development.
The new administration has initiated boldreforms to reestablish the macroeconomic
conditions for stability and growth. The
petrol fiscal subsidy was eliminated, morethan trebling petrol prices. FX reforms
have been undertaken, leading to the unification of FX markets and to a market-reflective exchange rate. To alleviate the inflationary effects of these reforms on themost vulnerable, the government has been
implementing temporary cash transfers toreach 15 million households. Efforts arealso being made to tighten monetary

30.9
a

63.5

a

90.8

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.1

School enrollment, primary (% gross)

b

86.7

b

52.7

Total GHG emissions (mtCO2e)

401.0Life expectancy at birth, years

policy and refocus the Central Bank ofNigeria (CBN) on its core mandate ofmaintaining price stability.

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

Nigeria has initiated bold reforms to restore macroeconomic stability, but further
efforts are needed. The Government has
moved forward on normalization of monetary policy, revenue-driven fiscal consolidation, and liberalization of the foreignexchange (FX) market. Translating oilproceeds into fiscal revenues and FX inflows, and taming inflation are still major
challenges. Nominal earnings have not
kept up with inflation, pushing 10 million
additional Nigerians into poverty in 2023.
Risks to the outlook include weaker reform
momentum and popular discontent.

FIGURE 1 Nigeria / Oil price, exports, government
revenues, and real GDP growth
Percent, percent of GDP
20

Recent developments
Real GDP growth slowed from 3.3 percent
in 2022 to 2.9 percent in 2023. Agricultural
output decreased due to higher input
costs, sustained impact of floods, and insecurity. Services continued to hold up nonoil sector growth, especially in finance andinformation and communication. The oil
sector contracted for the fourth consecutive year, albeit at a lower rate.
Nigeria’s chronically high inflation
reached an all-time high of 29.9 percent
year-on-year in January 2024, driven byrising food and energy prices, loose monetary policy, and naira depreciation.
Nominal earnings have not kept up with
inflation, pushing another 10 million
Nigerians into poverty in 2023. CBN has
started tightening monetary policy byraising the monetary policy rate (MPR)
by 400 basis points to 22.75 percent in
February 2024 and by unclogging someof its transmission channels. CBN has
restarted open market operations (OMOs)
at yields closer to the MPR, halted new
development finance schemes, committed
to stop monetization of fiscal deficits, removed the Standing Deposit Facility cap,
raised the cash reserve ratio to 45 percent, and improved communication.
Fiscal pressures remained high despite theremoval of fuel subsidy in the budget andnaira devaluation. General government

FIGURE 2 Nigeria / Real GDP growth and sectoral
contributions to real GDP growth
US$/bbl110

15Percent
5

90

4

70

3

10

50

5

30

2
1

10
0

0

-10

-5

-1

-30
2015

2017

2019

GDP growth (lhs)
Revenues (lhs)
Exports (lhs)
Oil price (rhs)

2021

2023e

2025f

-2
2021

GDP growth (lhs)
Revenues (lhs)
Exports (lhs)
Oil price (rhs)

Sources: Nigerian National Bureau of Statistics, WDI, and World Bank.

2022
2023e
Agriculture
Non-oil Industry
GDP (factor prices)

2024f

2025f
Oil Industry
Services

Sources: Nigerian National Bureau of Statistics and World Bank.

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fiscal deficit in 2023 is estimated at 5.3
percent of GDP, 0.4 percentage points(pp) higher than in 2022. While oil revenues improved on the back of the naira
unification, gains from the removal of subsidy did not materialize as expected due
to low remittances from the Nigerian National Petroleum Corporation (NNPC) to
the federation and the emergence of an implicit FX petrol subsidy. Non-oil revenues
increased by 0.7 percentage points to 5.6
percent of GDP in 2023, but expenditures
picked up too, especially on capital goods
and interest payments. The current account balance (CAB) is estimated to haverecorded a surplus of 0.7 percent of GDP
in 2023, driven by lower interest payments
and imports. Gross reserves dropped by 11
percent to US$ 33bn in 2023 and net errors
and omissions remained high.

Outlook
The continuation of an ambitious reform program centered around macroeconomic stabilization is essential for

Nigeria to reap the reforms’ benefits.
The economy is projected to grow by
3.5 percent on average between 2024
and 2026, 0.9 pp higher than the population growth. The dissipation of thereforms’ initial shock and the stabilization of macroeconomic conditions
will instill a sustained but still slow
growth in the non-oil economy, while
the oil sector is expected to stabilize
with some recovery in production andslightly lower prices. Higher growth
rates will require structural reforms.
Inflation will remain elevated at 24.8
percent on average in 2024 but is expected to progressively moderate to15.1 percent by 2026 on the back ofmonetary policy tightening and exchange rate stabilization. As a result, poverty rates are expected to increase in 2024 and 2025 before stabilizing in 2026.
Exchange rate liberalization is expected to contribute to both fiscal and external balances. Fiscal pressure is expected to moderate over the outlook
due to higher dollar-denominated revenues and improved non-oil revenues.

TABLE 2 Nigeria / Macro poverty outlook indicators

The fiscal deficit is expected to drop
to 4.3 percent of GDP on average between 2024-2026, and debt servicing
to fall from 97 percent of revenues
in 2024 to 61 percent of revenue in
2026. Exchange rate depreciation will
also reduce imports, including gasoline, leading to a CAB of 1.2 percent
of GDP on average between 2024-2026.
Foreigninvestments
willfollow
macroeconomic stabilization.
Risks to Nigeria’s outlook are substantial, especially if reforms lose momentum or are reversed. Relatively weakmonetary policy tightening would beinsufficient to rein in inflation and attract foreign capital inflows, raising
the risks of an inflation-exchange rate
depreciation spiral. Failure to address
imbalances in petrol pricing and toraise non-oil revenues would jeopardize the reforms’ revenue gains,which, in turn, would lead to continued high fiscal deficit and risks of
its monetization. Rising insecurity, adverse climate shocks, and popular
discontent with inflation would dent
economic recovery.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices

2021
3.6

2022
3.3

2023e
2.9

2024f
3.3

2025f
3.5

2026f
3.7

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.4
2.1
-0.5
5.6

3.1
1.9
-4.6
6.7

2.7
1.1
0.7
4.2

3.2
1.7
1.8
4.4

3.4
1.9
1.6
4.7

3.6
2.2
1.7
4.9

Inflation (consumer price index)

17.0

18.8

24.7

24.8

18.5

15.1

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-0.7
-0.3

0.2
0.0

0.7
-0.1

2.2
-0.4

0.9
-0.5

0.5
-0.5

Fiscal balance (% of GDP)
Revenues (% of GDP)

-6.6
6.7

-4.9
6.7

-5.4
7.8

-4.6
8.7

-3.7
9.6

-3.8
9.6

Debt (% of GDP)
Primary balance (% of GDP)

39.0
-3.9

40.0
-1.5

48.9
-1.9

50.9
-1.0

46.6
-0.1

45.1
-0.1

34.6
66.2
90.6

35.3
67.1
91.3

38.9
69.8
91.9

40.7
70.9
91.9

42.3
71.7
91.8

42.5
71.4
91.2

2.3
35.1

3.0
35.4

3.1
35.6

3.4
36.1

3.2
36.5

3.5
37.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-LSS. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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RWANDAKey conditions andchallenges

Table 1

2023

Population, million

14.1

GDP, current US$ billion

13.7

GDP per capita, current US$

974.4

International poverty rate ($2.15)

a

52.0
a

78.0

a

92.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

43.7

School enrollment, primary (% gross)

b

134.9

b

66.1

Total GHG emissions (mtCO2e)

8.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Rwanda’s strong economic momentum
continued in 2023, with 8.2 percent
growth in 2023—led by services, manufacturing, and construction. Inflationarypressures have eased due to improvements
in domestic food production, lower commodity prices, and the tight monetary
policy stance by the central bank. RealGDP growth is projected at 7.6 percent
on average in 2024–2025.

In the decade up to 2019, Rwanda’s GDP
per capita increased steadily at a rate of
4.5 percent per year, surpassed only by
Ethiopia among SSA economies. Rwanda
has also achieved substantial gains inpoverty reduction, educational attainment,
health services delivery, and access to basic services. However, the economy faces
severe constraints. The heavy emphasis on
public investment has neither generated
sufficient jobs nor resulted in rapid gains
in productivity. The Human Capital Index
places Rwanda at 160th out of 174 countries. High public debt levels, vulnerability
to climate change, and the accelerating
degradation of natural assets will hinder
the achievement of Rwanda’s targets of becoming an upper middle-income country
by 2035 and a high-income country by
2050. The highest food inflation in 15 years(63 percent in March 2023) triggered by insufficient rainfall, highlighted the importance of increasing the persistently low
productivity in agriculture to increase incomes of rural households and to improve
food security and availability. Overcoming
these challenges will require greater reliance on private sector investment to enhance productivity growth, raise incomes,
and provide the necessary financing needed to address infrastructure shortfalls.
Critical areas, which would need toprogress faster and drive rapid private sector investment growth in Rwanda, include

enhancing competition, building firms’ capabilities, increasing access to finance, fostering development and diffusion of information and communication technologies,
and innovation.

Recent developments
Rwanda’s economy achieved significant
growth in 2023, estimated at 8.2 percent,despite lower global prices for its main exports and flooding that disrupted crop
production. This performance was supported by stronger services sector and robust domestic demand, fueled by sizable
investment projects. The information andcommunications industry made the largest
contribution to GDP growth, benefitingfrom increased internet and mobile subscriptions, followed by manufacturing,transport services, and construction.
The National Bank of Rwanda’s tightermonetary stance, along with improvements in domestic food production andlower commodity prices, have contained
inflationary pressures. NBR hiked the policy rate by an additional 50 basis points inAugust 2023 to 7.5 percent (Figure 1). Inflation fell gradually to 4.9 percent in February 2024 from the peak of 22.7 percent
in November 2022. After experiencing 18
months of the highest monthly food inflation in the last 15 years starting in May
2022, much lower food inflation at 6.3 percent in February 2024 eased the pressure
on household budgets, especially for poor
households. To counteract the effect of a
sharp depreciation of the franc against the

FIGURE 1 Rwanda / Headline and core inflation and central
bank rate

FIGURE 2 Rwanda / Actual and projected poverty rates andreal private consumption per capita

Percent
25

Poverty rate (%)

Real private consumption per capita (constant LCU)

100

700000902060000080157050000060

40000050

10403000003020000020

510000010
0

0Jan-22

May-22
Inflation (CPI)

Sep-22

Jan-23May-23

Core inflation

Sep-2302010 2012 2014 2016 2018 2020 2022 2024 2026

Jan-24

Central bank rate

Source: World Bank staff estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

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U.S. dollar—about 18. percent in 2023—on
inflation, the NBR has doubled its dollar
sales to commercial banks to US$10 million
per week from US$5 million.
The FY24 budget envisages a temporary fiscal expansion to cushion the effects of recent
floods. Total reconstruction spending is estimated at around 3 percent of GDP over the
next five years, of which two-thirds will be
disbursed in FY24–FY25. The resulting creation of jobs in construction is expected tobenefit lower-income households. Despite
this, the government remains committed tofiscal prudence through improved domestic
revenue mobilization, spending rationalization, and increased transparency and efficiency. Relying largely on concessionalloans to finance the deficit, Rwandan’s public debt is sustainable despite increases inthe stock, which is estimated at 71.6 percent
of GDP in 2023.

Outlook
Rwanda’s GDP is projected to grow at
7.6 percent on average in 2024–26. After
weak performance in the last two years,

agriculture is expected to rebound due tofavorable weather. Growth will also be
supported by continued growth in global
tourism demand, construction, and manufacturing activities supported by the Manufacture and Build to Recover Program.
Driven by growth in private consumptionof 4.5 percent a year in 2024-2026, poverty
is projected to decline from 48.4 percent in
2024 to 47 percent in 2026. The current account deficit is projected to remain wider
in 2024 due to increased imports required
for the post-flood reconstruction and thelarge airport construction project. Sustained strong FDI inflows and concessional
financing will cover external financing
needs. Inflation is expected to gradually
return within NBR’s target of 5±3 percent.
The government is committed to prudent
fiscal management. In the FY24–FY26 budget framework, the government projects
spending cuts largely through streamlining and gradually reducing subsidies particularly those related to energy and fuel.
It is critical to reduce energy subsidies ina way that keeps electricity affordable forlow-income households. The authorities
are also planning to strengthen the oversight, governance, and risk management of

TABLE 2 Rwanda / Macro poverty outlook indicatorsstate-owned enterprises while safeguarding fiscal space for human capital spending. The government also intends to improve revenue administration and cut tax
rates while broadening the tax basethrough measures in the Medium-Term
Revenue Strategy. Under this baseline,
public debt would peak at 78 percent of
GDP in 2024 before gradually improving
over the medium term.
The outlook is subject to substantial downside risks. Even though Rwanda has limited direct trade and financial links to theMiddle East, an intensification of the conflict in the region could lead to further disruptions to the global trade and economy,
thus affecting Rwanda mainly through areduced global demand for its main export
products. Limited access to concessional
resources and lower external demand fueled by monetary tightening in advanced
economies pose further downside risks.
The main risk on the domestic front
is linked to the increasing frequency of
weather and climate shocks, which could
disrupt agricultural output again negatively affecting incomes and food security for rural households, and reigniting
inflationary pressures on food.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
10.9
6.0
13.7
9.6
2.4
2.7

2022
8.2
12.1
10.6
-12.6
29.4
17.9

2023e
8.2
8.0
3.1
4.5
25.8
14.4

2024f
7.6
4.5
14.6
15.0
13.1
12.6

2025f
7.8
6.8
10.1
10.7
11.2
10.9

2026f
7.5
6.8
8.1
7.2
11.2
8.9

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

10.6
6.4
13.3
11.9

7.8
1.6
5.0
12.2

8.6
1.7
10.2
11.2

7.6
6.6
9.5
7.3

7.8
5.5
9.3
8.3

7.5
5.4
9.0
7.9

Inflation (consumer price index)

1.1

12.1

15.4

6.8

5.0

5.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-11.1
2.1

-9.7
2.4

-11.9
3.3

-11.3
3.9

-10.1
4.4

-10.2
4.5

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-9.8
24.8
74.4
-8.0

-9.2
23.5
69.9
-7.3

-8.5
22.9
73.0
-6.3

-6.8
23.1
78.0
-4.9

-5.6
23.3
77.6
-4.0

-5.9
23.2
75.2
-4.6

51.1
77.5
92.0

49.6
76.5
91.7

48.7
76.0
91.6

48.4
75.8
91.5

47.7
75.3
91.4

47.0
74.9
91.2

6.4
31.1

2.5
30.7

1.4
29.8

2.4
30.0

2.9
30.2

3.2
30.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2010-EICV-III and 2016-EICV-V. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
b/ Projection using average elasticity (2010-2016) with pass-through = 0.25 based on private consumption per capita in constant LCU.

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71

Apr 24SÃO TOMÉ ANDPRÍNCIPE
Table 1

2023

Population, million

0.2GDP, current US$ billion

0.6

GDP per capita, current US$

2651.6

International poverty rate ($2.15)

a

15.7
a

45.0

a

79.7

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

Key conditions andchallenges

a

40.7

School enrollment, primary (% gross)

b

109.6

b

67.6

Total GHG emissions (mtCO2e)

0.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2017 PPPs.
b/ Most recent WDI value (2021).

Crisis in the electricity sector and uncertainty in external concessional financing
pushed the economy into recession. GDP isestimated to have contracted by 0.5 percent.
Poverty rate is estimated at 15.8 percent.
GDP growth is projected to recover in themedium term, supported by tourism, agriculture, infrastructure, and renewed external financing. Risks result from delays inconcluding IMF program discussions,slow energy reforms, weather-related
shocks, and global geopolitical tensions.

São Tomé and Príncipe (STP) is a remoteand small island nation with untapped
natural wealth. STP is home to pristine
rainforests, a rich and unique biodiversity, and a humid tropical climate with
abundant rainfall. Given its vast natural
wealth, agriculture, fisheries, and tourism
have significant potential to accelerate
growth in STP. However, STP's economic
and social development has been constrained by its small productive base,weak private sector, institutional fragility,and high vulnerability to climate shocks,
coupled with underdeveloped infrastructure, such as an unreliable power sector
and limited connectivity.
In the past, growth in STP was supported
by large inflows of external concessional
financing and grants, which have fueleda public investment-led growth model.
However, this growth model has become
unsustainable due to the structural decline and volatility of grants. As a result,
growth has slowed in recent years, further undermined by recurrent energy
crises, climate shocks, and surging commodity prices due to escalating global
geopolitical tensions.
Consequently, slow growth has hindered
progress in poverty reduction by restricting job opportunities and exacerbating
the vulnerability of the poorest. Moreover, excessive reliance on external concessional financing, low domestic revenue

mobilization, and high expenditure rigidity limited spending on human capital.
Thus, with limited access to basic services
and social protection, the poorest bear thebrunt of economic and climate shocks, facing increased difficulty in meeting their
daily needs given the rising living costs.
Nonetheless, the new government has
committed to implementing the needed
structural reforms to restore macroeconomic stability and promote growth,particularly energy reforms. Fiscal reforms have been initiated, including the
introduction of the value-added tax(VAT). The reform agenda is expected to
be backed by a forthcoming IMF program, which should also help mobilize
further concessional financing.

Recent developments
Real GDP is estimated to have contracted
by 0.5 percent in 2023 due to the aggravated energy crisis and fuel shortage that halted economic activity for two weeks, anddelays in external financing disbursements, partly explained by the longerthan-expected discussions on the upcoming IMF program. However, the recession
was mitigated by a strong recovery intourism: tourist arrivals peaked at 35,817
in 2023, above pre-pandemic levels.
The current account deficit is estimated tohave remained around 15.4 percent of
GDP in 2023, due to a due to higher imports bill and wider trade deficit.
Inflationary pressures eased despite theintroduction of VAT, as the Central BankFIGURE 1 São Tomé and Príncipe / Real GDP growth andcontributions to real GDP growth

FIGURE 2 São Tomé and Príncipe / Actual and projected
poverty rates and real GDP per capita

Percent (y/y)
8
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
2019

Poverty rate (%)

2020

Agriculture
Services

2021

2022

2023f

2024f

2025f

19000

90

18500

80

18000

70

17500

60

17000

50

16500

40

16000

30

15500

20

15000

10

14500

0

2026f

14000
2010 2012 2014 2016 2018 2020 2022 2024 2026

Industry
Real GDP growth rate

Sources: São Tomé and Príncipe authorities' data, IMF and World Bank staff estimates.

MPO

Real GDP per capita (constant LCU)

100

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

72

Apr 24

of STP (BCSTP) tightened liquidity conditions and issued certificates of deposit
in May 2023, coupled with higher interest
rates on T-bills, and subdued domestic
demand. Inflation declined from 25.2 percent in 2022 to 21.2 percent in 2023, andthe monetary base (M0) contracted by
11.6 percent. However, delays in externalfinancing disbursements and high fuelrelated import demand depleted net international reserves, threatening the currency’s peg to the euro. The BCSTP responded by entering into a non-concessional foreign exchange swap agreement
for about US$30 million with Afreximbank to boost reserves, of which US$12
million was disbursed. Although further
disbursement of grants supported net international reserves, the latter remain below one month of imports. The fiscal balance remained in deficit, estimated at -3.6
percent of GDP in 2023 primarily due toreduced grant disbursements, despite theintroduction of the VAT in June 2023 tosupport revenue mobilization.
As a result of these adverse macro-fiscal
conditions, the livelihoods of the poorest
deteriorated. The share of people thatwere living on less than US$2.15 per day(in 2017 PPP terms) is estimated to haveslightly increased to 15.8 percent in 2023,
from 15.6 percent in the previous year.

OutlookReal GDP growth is expected to recover
to 2.5 percent in 2024 and then 3.6 percent in 2026. Growth over the medium term is supported by a stronger
agricultural sector, including palm oiland cocoa exports, continued tourism
rebound, foreign investments, including
for increased electricity capacity and renewable energy projects, and resumption of externally funded infrastructure
projects, such as the rehabilitation of the
Marginal Road.
The current account deficit is projected
to improve from 15.4 percent in 2023
to 12.6 percent in 2024 and 10.8 percent
in 2026 as the trade deficit narrows
with the drop in the cost of commodities (fuel and food), tourism continues to recover, and fiscal consolidation
weighs on the twin deficit of fiscal andexternal balances.

TABLE 2 São Tomé and Príncipe / Macro poverty outlook indicators

A tight monetary policy stance and lower
global commodity prices are expected toreduce inflation to 12.1 percent in 2024.
The resumption of externally financing
disbursements, an expected IMF-supported fiscal consolidation, and the full impact
of VAT implementation would improve
STP’s fiscal position in 2024. These measures are projected to contribute to an improvement in the domestic primary balance deficit from -2.7 percent in 2023 to 1.4
percent of GDP in 2024 and 1.6 percent of
GDP in 2026.
Risks to the outlook come from delaysin the new IMF program discussion, andrelatedly delayed external financing disbursements, slow implementation of energy reforms, and weather-related events.
Adverse developments in global commodity prices due to geopolitical tensions are also a risk factor. In addition,
the outlook for poverty alleviation in STP
remains uncertain and the share of people living in extreme poverty is projected to stagnate in the short term, with aslight decline in the medium-term. Whileeconomic recovery is projected in 2024,
the benefits may not reach the most vulnerable without concerted efforts.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices

2021
1.9

2022
0.1

2023e
-0.5

2024f
2.5

2025f
3.1

2026f
3.6

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.1
-0.3
-6.4
5.6

2.5
-13.6
6.4
3.1

-0.5
-12.4
-13.5
3.1

2.5
2.0
1.5
2.7

3.1
2.8
2.0
3.3

3.6
2.8
2.0
3.9

Inflation (consumer price index)

9.5

25.2

21.2

12.1

7.4

7.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-19.2
3.5

-14.6
23.3

-14.1
3.5

-10.9
5.0

-9.6
5.7

-8.5
7.0

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-3.9
19.8
77.8
-3.7

-4.5
25.4
68.5
-4.0

-3.3
23.5
57.5
-2.4

-0.1
21.6
52.7
1.3

0.2
21.6
47.7
1.0

0.6
21.3
41.3
1.2

15.4
44.6
79.0

15.6
44.8
79.3

15.8
45.1
79.8

15.7
45.0
79.7

15.6
44.9
79.5

15.5
44.7
79.2

1.2
35.7

0.6
35.6

0.4
35.8

0.9
36.3

1.4
36.9

1.7
37.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on GDP per capita in constant LCU.
b/ Actual data: 2017. Nowcast: 2018-2023. Forecasts are from 2024 to 2026.

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73

Apr 24

SENEGAL

Key conditions andchallenges

Table 1

2023

Population, million

17.8

GDP, current US$ billion

31.1

GDP per capita, current US$

1753.3

International poverty rate ($2.15)

a

9.9
a

36.3

a

75.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

36.2

School enrollment, primary (% gross)

b

83.3

b

67.1

Total GHG emissions (mtCO2e)36.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Economic growth slowed slightly to 3.7
percent in 2023 due to social unrest anddelayed hydrocarbon production. The fiscal deficit and debt remained high, fueled by energy subsidies and frontloaded
financing. Inflation averaged 6.1 percent, eroding household purchasing
power, but poverty remains unchanged.
Economic activity is set to rebound in
the medium term, supported by hydrocarbon production. Political uncertainty,hydrocarbon production delays, andgeopolitical tensions threaten the outlook.

Senegal’s socioeconomic development
challenges are heightened by rising uncertainty. Declining yet high inflation andunfavorable global and domestic financial
conditions combined with high debt levels undermine macro-fiscal stability.
Structural vulnerabilities, such as low
productivity, limited human capital, highinformality, and youth emigration, persist
and are exacerbated by external shocks,
as seen during the COVID-19 pandemic
and Russia’s invasion of Ukraine. Despite
the emphasis on industrialization in theaction plan PAP3 of the government’s
Plan Senegal Emergent, the transition toa more diversified economy with a larger
industrial base remains limited, with theeconomy remaining heavily reliant on
agriculture and services. The onset of hydrocarbon production offers an opportunity to accelerate equitable investment
in human capital, provided that relatedresources are managed within a strong
governance framework.

Recent developments
Economic growth remained broadly
stable around 3.7 percent in 2023 (1.1
percent per capita) as political tensions
and social unrest disrupted consumer
spending and delayed investment in key

sectors, including ICT, trade, and transport. As a result, the services sector decelerated from 5.1 percent in 2022 to 3.3
percent in 2023. Gold production declined
by 15.5 percent (year-on-year) due to lower demand, reserve depletion, and labor
strikes. Challenges in the extractive industry led to a slower-than-expected performance in the industry sector despite
strong cement sales. Headline inflation
averaged 6.1 percent in 2023 as food andenergy prices continued their downward
trends – although remaining well above
the regional Central Bank’s target bandof 1-3 percent. Poverty incidence (using
the $3.65 per capita per day in 2017 PPP
international poverty line) remained stable at 36.4 percent in 2023, from 36.5 percent in 2022. While rising prices eroded
the purchasing power of households thiswas mitigated by growth in the agriculture sector, which employs most of thepoor. The national poverty trend is the result of a slight increase in urban areas,
while the poverty rate slightly decreasedin rural areas.
The fiscal deficit is expected to remain
at 6.6 – above the 4.9 percent of
GDP objective set in the 2023 Budget
Law – driven by lower tax collection
and persistently high energy subsidies.
The former declined to 17.3 percent of
GDP – about 1 percentage point below its 2022 level – owed to lower revenue collection on international trade.
Public expenditure declined to 25.7
percent of GDP from 26.6 percent,thanks to a decline in current spending. Fiscal measures to support purchasing power (0.6 percent of GDP)

FIGURE 1 Senegal / Evolution of main macroeconomic
indicators

FIGURE 2 Senegal / Actual and projected poverty rates andreal GDP per capita

Percent
10

Poverty rate (%)

Percent of GDP
0

Real GDP per capita (constant LCU)

100

81200000

90

-5

6
4

70

-10

50

-15

-2

20

2019

2021

2023e

200000

10

-25
2017

400000

30

-4
2015

600000

40

-20

-6

80000060

201000000

80

0

2025p

0
2011 2013 2015 2017 2019 2021 2023 2025

GDP growth (lhs)
Primary fiscal balance (lhs)
Current account balance (rhs)
Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

74

Apr 24

and energy sector subsidies encompassing
outstanding arrears (4.2 percent of GDP
end-September 2023) continue to hinder
fiscal consolidation efforts. Public debt remains at moderate risk of debt distress,
with limited margins to absorb future
shocks. The current account deficit is estimated at 14.5 percent in 2023 from 20 percent in 2022, driven by lower service imports related to hydrocarbon services, increased export prices, and the resumptionof trade with Mali. It was financed by foreign direct investments, portfolio investments, remittances, and external credits.
To counter inflation across WAEMU countries, the Central Bank of West African
States (BCEAO) raised policy interest rates
by a cumulative 150 basis points since
mid-2022 to 3.5 percent for liquidity callsand 5.5 percent for the marginal lending
facility. However, inflation in the region(3.7 percent in 2023) was still above the
1-3 percent target and foreign exchange reserves have been on a downward trend,
estimated at 3.5 months of imports at
end-2023, down from 4.3 months at theend of 2022.

Outlook
Economic growth is projected to average
7.5 percent in 2024-2026 (4.8 percent percapita) and be broad based, driven by hydrocarbon production from mid-2024, anda rebound in the mining sector spurred by
the discovery of new gold and phosphatemines as well as agriculture and services.
Aggregate demand will be supported byprivate consumption. The baseline assumes favorable rainfall and fading political uncertainty. Inflation is forecasted todecelerate to 2 percent by 2025 as food andenergy prices maintain downward trends.
The BCEAO may need to continue monetary
tightening in 2024 to bring inflation undercontrol and in the context of rising uncertainties over the withdrawal of Niger, Mali,
and Burkina Faso from ECOWAS and potential spillovers to WAEMU. These uncertainties are likely to increase investors’ risk
perceptions leading to tighter financing
conditions and putting additional strain on
already low foreign exchange reserves.

TABLE 2 Senegal / Macro poverty outlook indicators

Projected growth, including in agriculture,
the expansion of cash transfers, and declining food prices are expected to affecthousehold well-being positively. Consequently, poverty is expected to resume adownward trend in 2024.
Fiscal consolidation efforts, including reduced energy subsidies and increased tax
revenues, should enable the fiscal deficit to
decline toward the WAEMU convergencecriteria of 3 percent of GDP by 2025. Undera benign base case, public debt is expected
to decline gradually to 67.2 percent in 2026.
However, extreme weather shocks or increases in security spending could delay
the necessary fiscal adjustment and exacerbate debt sustainability risks. The CAD
is projected to narrow significantly from
9.5 percent of GDP in 2024 to an average
4.7 percent in 2025-6 as hydrocarbon exports begin, although a potential risk remains as the Alliance of Sahel States withdrawal from ECOWAS will impact exports
to Mali. Regional uncertainties could leadto further tightening of financing conditions and put additional strain on alreadylow foreign exchange reserves.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.5
3.4
14.4
15.8
22.5
16.0

2022
3.8
3.5
1.5
11.0
3.5
12.4

2023e
3.7
2.3
-7.1
12.5
6.7
6.0

2024f
7.1
3.1
14.7
6.0
14.3
5.4

2025f
9.7
3.6
7.7
8.8
20.1
4.9

2026f
5.7
3.7
4.5
8.6
3.4
3.1

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.3
0.8
7.1
7.7

3.6
0.3
2.6
5.1

3.7
6.2
2.9
3.3

7.1
6.3
16.8
3.2

9.7
6.4
23.4
4.0

5.7
6.5
3.9
6.5

Inflation (consumer price index)
Current account balance (% of GDP)

2.2
-12.1

9.7
-20.0

6.1
-14.5

3.0
-9.5

2.0
-4.8

2.0
-4.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.3
19.5
73.4
-4.3

-6.6
20.0
76.1
-4.4

-6.6
19.2
79.5
-3.9

-4.8
20.8
72.4
-2.2

-3.0
21.8
67.5
-0.8

-3.0
22.3
67.2
-1.1

9.9
36.3
75.6

10.0
36.5
75.9

9.8
36.4
76.3

8.7
33.9
74.1

7.2
30.9
71.1

6.4
29.5
69.5

3.1
24.2

1.1
24.5

0.5
24.0

3.8
24.2

5.5
24.5

5.1
23.8

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO

75

Apr 24SEYCHELLES
Table 1

Key conditions andchallenges
2023

Population, million

0.1

GDP, current US$ billion

2.1

GDP per capita, current US$

20446.9

International poverty rate ($2.15)a

0.5

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

a

1.2

a

6.7
32.1

School enrollment, primary (% gross)

b

97.6

b

73.4

Total GHG emissions (mtCO2e)

1.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

Economic growth is expected to reach 3.5
percent in 2024, supported by tourism andthe rebuilding of infrastructure damagedby extreme weather and the blast at an explosives depot in 2023. Despite theseshocks, average earnings have increased by
4.8 percent and the poverty rate remained
stable at 5.9 percent in 2023. The government has prioritized support for vulnerable groups and investments to enhance
climate resilience while maintaining its
commitment to fiscal prudence.

The Seychelles is a high-income country
with the highest GDP per capita in Sub-Saharan Africa but is highly vulnerable to external shocks. Tourism accounts for 31 percent of GDP and 41 percent of exports. Over90 percent of production inputs are imported, making the country highly vulnerable toglobal commodity shocks and pandemics.
In 2020, during the COVID-19 pandemic,
the economy shrunk by 8.5 percent, and thefiscal deficit widened to 16.4 percent of GDP,
while poverty rates based on the upper-middle-income line of US$6.85 per person per
day rose to 8.0 percent. Moreover, the Seychelles is vulnerable to climate shocks. The
heavy rains and the explosion that occurredin December 2023 highlight the country's
vulnerability to climate change.
Prudent macroeconomic management hashelped the Seychelles manage shocks andsustain growth. Measures implemented tomitigate the pandemic supported a quick
recovery and were subsequently phased
out. The government has implemented fiscal consolidation since 2021 and has taken
measures to improve the resilience of theeconomy while also addressing the effectof external shocks. Adaptation investments to strengthen climate resilience use
mostly concessional financing, complemented by private sector efforts. Fiscal
measures such as the 2023 tourism environmental sustainability levy help raise resources for climate initiatives, with morethan 4 percent of the Seychelles’ budget allocated to climate resilience.
Further improvements to the business environment and a renewed focus on employment are needed to maintain inclusive
growth. Labor earnings have been central
to reducing poverty, yet labor and skills
shortages and a growing rate of drug andalcohol addiction constrain further advances. Labor shortages were partly addressed through migration, with migrants
representing 22 percent of the working-age
population. The 2023 Enterprise Survey indicates that firms identified a low supplyof skilled labor (20 percent of firms) andlimited land (25 percent of firms) as major
obstacles in doing business.

Recent developments
Growth was an estimated 3.3 percent in 2023
compared to 8.9 percent in 2022, driven bymodest increases in tourism, particularly
from key markets in Europe impacted bytight monetary conditions and the war in
Ukraine. Furthermore, geopolitical issues in
Israel affected tourist arrivals from Asia. In
2023Q3, employment decreased by 0.2 percent, while average earnings saw a 4.8 percent increase compared with the same quarter in 2022 due to an upward revision to public sector wages. Heavy rainfall, landslides,
and floods in the north of Mahé island,
coupled with a massive explosion in a key
industrial zone, damaged commercial
buildings, houses, and public infrastructure at the end of 2023. This incident has
impacted growth and increased household

FIGURE 1 Seychelles / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 Seychelles / Actual and projected poverty rates
and real GDP per capita

Percent
10

Poverty rate (%)

8
6
4
2

Real GDP per capita (constant LCU)

12

30000010250000820000061500004100000

2

50000

0
-2
Agriculture
Industry
Services
Gross value added at basic prices

-4
-6

0

-8
-10

0
2013

2019

2020

2021

2022

2023e

2024f

2025f

2026f

Sources: National Bureau of Statistics and World Bank staff calculations.

2015

2017

2019

76

Apr 242023

2025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2021

vulnerability. Consequently, the government has provided support to households
and businesses to rebuild and re-occupy
their premises.
Inflation remained low, prompting the Central Bank of Seychelles to maintain the monetary policy rate at 2 percent. In 2023, appreciation of the rupee and moderation in global commodity prices contributed to declining domestic prices, with year-end inflationof -2.71 percent. The primary fiscal balance
was 1.4 percent of GDP, as revenue increased, led by strong business and property tax collections, despite higher government expenditure due to higher public sector wages and the establishment of theHome Care Agency. Although the budget
allocated to capital expenditure was higher
than in 2022, project under-execution of 32
percent resulted in budget savings. Public
debt declined to 60.1 percent of GDP due torepayments of external debt. The current account deficit narrowed to an estimated at 5.6
percent of GDP. The deficit is financed byforeign direct investments, equivalent to13.8 percent of GDP, primarily from investments in hotels and resorts. Foreign exchange reserves increased to US$681 million
in 2023, covering 3.8 months of imports.

Outlook
The economy is expected to grow by 3.5
percent in 2024, supported by tourism
and increases in flight seat capacity to
the islands. Additionally, with 450 new
hotel rooms expected to become available during the year, tourism receipts
are projected to increase. However,weak trade and commerce within theProvidence industrial zone due to thegradual recovery from last year’s explosion are expected to weigh on growth.
Fiscal measures and reconstruction efforts to restore businesses’ operationality by end-2024 are expected to support
the economic recovery beyond 2024.
Following the December incidents, thegovernment’s priorities are to support
vulnerable groups whose homes weredamaged and to invest in strengthening
resilience to climate events, including
building and maintaining structures likebridges, watersheds, canals, retaining
walls, and coastal blockades. Additional
spending beyond already planned investments is needed to rebuild better.

TABLE 2 Seychelles / Macro poverty outlook indicators

This is expected to contribute to an increase in public debt to 62 percent of
GDP. However, the government remains
committed to containing public debt in
the medium term and developing thegovernment securities market by issuingbonds to reduce refinancing risk. In thecontext of low inflation expectations, themonetary authority is expected to maintain the monetary policy rate at 2 percent in 2024. More robust tourism earnings are expected to contribute to a stable rupee, even though the current account deficit is projected to widen as
imports increase for consumption andreconstruction efforts.
The country’s reliance on the European
tourist market is a risk, and delays in
the opening of new and renovated hotels could also result in a lower-than-expected yield from tourism in 2024. Additionally, attacks on commercial vessels in the Red Sea could increase inflation through higher import prices,which may disproportionally affect thepoor. Lastly, climate shocks pose a significant risk, underscoring the importance of sustainable growth and poverty
reduction strategies.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.5
1.3
4.3
0.4
6.2
4.7

2022
8.9
6.6
2.5
2.7
9.1
3.1

2023e
3.3
6.4
6.0
34.3
5.7
15.0

2024f
3.5
1.4
5.5
8.6
8.7
9.4

2025f
3.4
6.5
5.2
-1.2
6.2
5.4

2026f
3.4
3.7
5.0
2.1
6.0
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.5
0.8
-4.9
4.2

9.0
-1.0
3.3
10.5

3.3
4.2
5.1
2.9

3.5
2.1
-1.5
4.5

3.4
2.1
3.5
3.4

3.4
2.1
4.5
3.2

Inflation (consumer price index)

7.9

2.5

-2.7

3.4

2.8

2.3

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-8.9
9.3

-7.1
11.3

-6.9
13.6

-7.4
11.2

-7.2
10.2

-6.4
9.9

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-5.8
33.0
73.1
-2.9

-1.5
31.2
63.6
0.7

-1.3
32.6
60.1
1.7

-1.4
35.1
62.0
1.0

-0.9
35.7
60.1
1.1

0.1
35.2
57.2
1.6

0.7
1.7
8.4

0.5
1.2
6.4

0.5
1.1
5.9

0.5
1.1
5.9

0.4
1.0
5.6

0.4
0.9
5.4

6.9
78.4

10.0
79.6

11.5
81.0

11.9
82.3

12.1
83.4

11.9
84.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-HBS. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2018) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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SIERRA LEONE
Table 1

2023

Population, million

8.8GDP, current US$ billion

3.5

GDP per capita, current US$

394.1

International poverty rate ($2.15)

a

26.1
a

64.3

a

89.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

35.7

School enrollment, primary (% gross)

b

151.7

b

60.1

Total GHG emissions (mtCO2e)9.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

The economy continues to face significant challenges as policy missteps haveaggravated the impact of external
shocks, resulting in high and stubborn
inflation, pressures on the currency,
high risk of debt distress and inadequate
growth to support poverty reduction.
Despite some efforts in 2023, further
corrective fiscal and monetary measures
are urgently needed to address high inflationary pressure and the worsened
food insecurity situation.

Key conditions andchallenges
Economic development has been constrained by the country's susceptibility toexternal shocks, often been compounded
by weak macroeconomic management.
During the last decade, growth has averaged 4 percent (8 percent in the previous
decade) with high volatility marked byepisodes of boom and bust. The country’s
concentrated economic structure– heavy
reliance on low-value-added agriculture,mining, a sizable informal services sector– lends itself to volatility. Policy slippages
with regard to macroeconomic management have aggravated the impact of external shocks. In addition to low growth, thishas caused debt levels to rise markedly,
ranking among the highest in the region,and headline inflation to increase to a twodecade high in 2023. Economic growth has
been held back by structural factors suchas low private sector participation and investments, inadequate human capital,poor infrastructure, and weak institutions.

Recent developments
Economic activity slowed due to subdued
aggregate demand and socio-political instability. GDP growth is estimated at 3.1
percent in 2023, marking the second consecutive year of a slowdown. High and persistent inflation, compounded by a recent

coup attempt, has eroded households’ purchasing power and constrained private
consumption and investment. However,amidst these challenges, the mining sector
performed well, buoyed by strong iron ore
production and exports, and promising
agricultural output.
Inflationary pressures intensified, withsome tentative signs of moderation in thelast quarter of 2023. Headline inflation averaged 47.6 percent during 2023 – the second highest in Africa after Sudan – driven
by a combination of supply side factors(high food and fuel inflation), a depreciated currency, and continued fiscal dominance. Food inflation averaged 57 percent.
In response, the central bank raised rates
by a cumulative 525 basis points in 2023
to 22.25 percent by year-end. However, theefficacy of monetary policy is limited byshallow financial markets, and fiscal dominance. Inflation showed some signs ofmoderating after peaking at 54.6 percent(y-o-y) in October, down to 47 percent by
January 2024.
The fiscal position improved marginallyin 2023 but fell short of the year’s targets.
The fiscal deficit narrowed to 8 percent –1.3 percentage points lower than in 2022
but 2.2pp higher than the budgeted target. Expenditures were 2.6pp lower thanin 2022, with cuts in wages and salaries(1pp), subsidies (1pp) and capex (0.6pp).
Domestic revenue performance, although
1pp below target, improved by 0.4pp due
to partial implementation of policy measures introduced in 2023, and improvements in tax compliance. Public debt declined to 87 percent of GDP from 93 percent in 2022, but liquidity and solvency

FIGURE 1 Sierra Leone / Real GDP growth and contributions
to real GDP growth

FIGURE 2 Sierra Leone / Actual and projected poverty rates
and real GDP per capita

Percent, percentage points

Poverty rate (%)

50

100

1.6

40

90

1.4

30

80

20

70

10

60

1.0

Real GDP per capita (constant million LCU)

1.2

0

50

0.8

-10

40

0.6

-20

30

-30

20

0.4
0.2

10

-40
2001

2004

2007

Gov. cons.
Inventories
Statistical disc.

2010

2013

2016

Exports
Private cons.
GDP

2019

2022

2025

0

0.0
2011

GFCF
Imports

Sources: Statistics Sierra Leone and World Bank.

2013

2015

2017

2019

78

Apr 242023

2025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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2021

risks to debt sustainability remain elevated. External debt, mainly owed to multilateral organizations, constitutes twothirds of the total, while the remaining isshort-term domestic debt.
The trade and current account balances
improved slightly due to stronger ironore exports and subdued import demand. Capital inflows improved largelyon account of higher project grants.
However, official reserves declined
nonetheless to barely three months ofimport cover due to external debt service, currency interventions, and foreign
currency payments to diplomatic missions overseas. The currency depreciatedby 18 percent (40 percent in 2022).
Decline in poverty slowed down in 2023.
Extreme poverty rate is (PPP$ 2.15/day) estimated at 25.3 percent in 2023, compared
to 25.7 in the previous year. Rising foodprice increases will continue to have a disproportionate impact on the poor. WFP estimates high prevalence of insufficient
food consumption, affecting 55 percent of
the population.

Outlook
Growth is projected to recover slowly to
3.5 percent in 2024 against a backdrop ofhigh inflation and continued fiscal consolidation, before converging to its long-term
average of 4-4.5 percent in the mediumterm. The projected recovery will be supported by (i) continued growth in ironmining with planned expansion at major
mines, (ii) resilience in agricultural production as it trends closer to its long-term
average of 3.2 percent growth, and (iii)
gradual service sector improvements. Inflation will be influenced by global commodity prices and monetary tightening
and is expected to moderate to 15 percent
by 2026. Elevated prices will continue toimpact consumption and investment appetite, while fiscal consolidation will affectaggregate demand.
Upholding fiscal and monetary policy
tightening is pivotal for macroeconomic
stability. Fiscal outlook relies on revenue

TABLE 2 Sierra Leone / Macro poverty outlook indicators

measures identified in the Medium-Term
Revenue Strategy and near-term expenditure consolidation, especially on wages
and subsidies. Monetary policy tightening
should be complemented with reduced
central bank interventions and developing
the money market.
Pace of poverty reduction is expected topick-up as inflation subsides in the medium term. The international poverty rate
(PPP$2.15 /day) is expected to decline to22.7 percent by 2026, supported by recovering growth and moderating inflation.
This outlook is subject to several downside risks. Deviating from fiscal consolidation may jeopardize stability, as debt
sustainability risks remain elevated. Adverse global developments (including
slowing growth in China) can impact
commodity prices and exports. Climate
vulnerabilities and inflation could increase food insecurity and aggravate social tensions. The risk of political instability remains high, following a disputed general election and an attempted
coup, that affected policy momentum.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
4.1
36.7
0.6
-30.0
1.9
46.6

2022
3.5
-0.7
10.2
-2.8
5.0
-0.3

2023e
3.1
5.1
2.4
2.7
20.0
10.5

2024f
3.5
6.4
2.3
3.1
19.5
12.0

2025f
4.0
7.4
3.8
4.9
18.0
13.0

2026f
4.3
8.0
5.3
5.6
15.0
13.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

4.0
2.5
17.4
2.8

3.6
3.0
8.2
3.2

3.1
2.7
5.0
3.0

3.5
3.2
6.0
3.1

3.9
3.3
6.6
4.1

4.3
3.3
6.6
5.0

Inflation (consumer price index)

11.9

27.0

46.7

30.5

20.0

14.6

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-8.7
8.5

-9.3
8.2

-7.8
5.8

-5.1
8.8

-4.6
9.8

-3.6
12.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-7.6
21.1
84.7
-4.2

-9.3
18.9
93.0
-6.0

-8.0
18.1
87.0
-3.9

-5.0
20.1
76.6
-0.5

-3.1
20.1
65.4
1.0

-2.6
20.5
60.9
1.0

26.2
65.0
90.8

25.7
64.6
90.5

25.3
64.1
90.4

24.5
63.5
90.2

23.7
62.7
89.7

22.7
61.4
89.2

1.6
11.3

2.4
11.0

0.4
10.9

0.3
10.9

0.3
10.9

0.3
10.9

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-SLIHS. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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SOMALIA

Key conditions andchallenges

Table 1

2023

Population, million

a

16.1

GDP, current US$ billion

b

11.7

GDP per capita, current US$
Gini index

727.7

c

37.0

School enrollment, primary (% net)

c

25.0

d

55.3

Total GHG emissions (mtCO2e)43.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Estimates based on 2013 population estimates by UNFPA and assume an average annual population growth of
2.8%.
b/ Somalia released new GDP series (2017-22) in June
2023, rebasing the old series.
c/ Somalia Integrated Household Budget Survey 2022
(SNBS, 2023).
d/ Most recent WDI value (2021).

The economy continues its recovery as
improved weather conditions boost agriculture production, private consumption, and exports. GDP is estimated tohave grown at 3.1 percent in 2023, up
from 2.4 percent in 2022. Supported byfavorable rains and declining global
prices, inflation eased in 2023 but remained sticky. Nevertheless, recurrent
shocks such as the ongoing floods are
increasing the susceptibility of more
people falling into poverty.

Somalia continues to contend with frequent shocks in the context of widespreadfragility, conflict, and violence. Recurrent
climate-related shocks such as cycles ofdroughts, floods, locusts’ infestation,
volatile international commodity prices, aswell as increased insecurity and conflicthave interrupted the country’s growth trajectory and slowed the transition fromfragility. Growth has been modest anddoes not generate the jobs needed to reduce poverty. It averaged only 2 percent
annually in 2019–23 with an average negative real GDP per capita growth of 0.8
percent. Labor force participation rates are
exceptionally low with large gender gaps.
Only one-third of men and 12 percent of
women participate in the labor market.
Poverty is high and widespread, with recurrent shocks increasing the risk of more
people falling into poverty.
Somalia achieved a historic HIPC Completion Point (CP) milestone on December 13,
2023. Following the CP, Somalia received
full and irrevocable debt relief for thecountry of US$4.5 billion. As a result, Somalia’s external debt is estimated at lessthan 6 percent of GDP in 2023, from 64
percent in 2018. The country achieved thismilestone under a very challenging andfragile environment—the key structuralreforms were implemented at a time when
the country was plagued by multiple
shocks and challenges including the global

COVID-19 pandemic, protracted 15-monthelectoral impasse, prolonged and severe
drought, floods, locusts’ infestation, higher
international commodity prices, and increased insecurity and conflict. As thegovernment’s fiscal space remains limited
for development priorities and to respond to recurrent shocks, this debt relief
is expected to facilitate access to critical
additional financial resources needed tostrengthen the economy, reduce poverty,
and promote job creation.

Recent developments
The economy is rebounding graduallywith improved weather conditions contributing to the continued reversal of the
impacts of the prolonged 2020/23 severe
drought. Favorable rains in 2023 led to
improved agricultural production, reduced food insecurity, and supported
private consumption. Exports recovery
was faster than that of imports, as exports of livestock rebounded. Nevertheless, net exports continue to be a dragon growth as the economy is heavily
reliant on imports. Private sector credit
growth contributed to strengthening of
construction, real estate, and investment
as growth in remittances remained muted. Real GDP is estimated to have grown at
3.1 percent in 2023, at par with population
growth, up from 2.4 percent in 2022.
Inflationary pressures eased in 2023,
supported by better agriculture performance and declining commodity prices.
Overall inflation, however, remained

FIGURE 1 Somalia / Federal government revenue

FIGURE 2 Somalia / Actual and projected poverty rates andreal GDP per capita

Percent of GDP
8

Poverty rate (%)

790Real GDP per capita (constant LCU)

100

710
700

80

6

70

690

5

60

680

4

50
670

40

3

30

2

20

1

10

660
650

0

0
2018

2019

Tax revenue

2020

2021

Non-tax revenue

2022

640
2017

2023

2019

2021

International poverty rate

GrantsReal GDP pc

Sources: Somalia authorities and World Bank estimates.

Source: World Bank. Notes: see Table 2.

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Apr 242023

2025

Lower middle-income pov. rate

sticky, averaging 6.1 percent in 2023 compared to 6.8 percent in 2022. Favorable
rains in 2023 boosted agricultural production, easing local staple food prices. Food inflation averaged 0.7 percent in 2023, compared to 13.9 percent in 2022. The easing of
global commodity prices has led to lower fuel and energy prices locally, though still highcompared to pre-2022 levels, contributing to
the stickier overall inflation.
The Federal Government of Somalia (FGS)
ran a small surplus in 2023 but the fiscal
situation remains challenging due to low
domestic resource mobilization (Figure 1).
Domestic revenue mobilization improvedin 2023 to 2.8 percent of GDP, from 2.5 percent in 2022 but remained well below thedevelopment needs of the country. Public expenditures are dominated by personnel costs, while investments in human capital are largely financed by grants and investments in infrastructure are negligible.
To improve fiscal sustainability and maintain prudent fiscal policy, the government
will need to fast-track the numerous efforts
underway to increase domestic revenue aswell as constrain its wage bill and its reliance on external donor funds.

Poverty remains high. Projections basedon GDP per capita growth suggest poverty
has increased from 71 percent in 2017 to73 percent in 2023, based on the 2017
poverty line. According to the 2022 Integrated Household Budget Survey, while
poverty rates are highest among the nomadic population, due to Somali’s high urbanization, the largest share of the poor
are in urban areas. While the international
community has provided support in theform of food assistance, an expansion ofsocial safety net programs, and support toinformal settlers in urban areas, people remain vulnerable to falling below thepoverty line. Somalia remains vulnerable
to shocks, particularly climatic ones, underscoring the importance of strengthening resilience through advancing reforms
to support growth, food security, and theprovision of basic services.

OutlookMedium-term recovery is projected tobe modest as risks remain significant.

TABLE 2 Somalia / Macro poverty outlook indicators

Real GDP growth is projected to expand from 3.7 percent in 2024 to 4 percent in 2026. Economic reforms and increased public investment with HIPC
CP dividends will boost investor confidence and attract foreign direct investment (FDI) encouraging increased
broad-based private sector activity.
Moreover, the recovery of agricultural
production and exports is expected tocontinue with improving weather conditions. This, coupled with further easing of the global commodity prices,
is expected to keep inflation low.
Nonetheless, the outlook is subject tosignificant risks including climatic
shocks, security threats, and global
economic shocks.
The poverty rate is projected to decrease between 2024 and 2026, reaching 71 percent in 2026, although still
very high. Accelerating the pace ofpoverty reduction will require policy
interventions and public investmentsthat raise productivity, strengthen resilience, create jobs, and expand propoor programs that focus on womenand youth.

(percent of GDP unless indicated otherwise)

Real GDP growth, at constant market prices
CPI inflation, annual percentage change

2021
3.3
4.6

2022
2.4
6.8

2023e
3.1
6.1

2024f
3.7
3.9

2025f
3.9
3.7

2026f
4.0
3.5

Current account balance
Trade balancePrivate remittances
Official grants

-7.3
-50.9
21.5
23.0

-8.0
-61.2
20.6
33.0

-9.6
-58.8
20.3
29.3

-8.6
-58.5
20.4
29.8

-8.8
-57.7
20.6
28.6

-10.4
-56.9
21.0
25.9

b

-0.8
2.3
1.5
4.7

-0.1
2.5
4.4
7.0

0.2
2.8
3.5
6.2

-0.4
2.8
4.3
7.5

-1.2
3.0
3.0
7.1

-1.8
3.3
1.5
6.6

Compensation of employees
External debt

2.5
39.9

2.5
36.7

2.5
5.4

2.6
5.0

2.5
5.7

2.5
7.2

72.6
91.3
99.8

72.8
91.4
99.9

72.7
91.3
99.8

72.1
91.0
99.5

71.6
90.7
99.1

71.0
90.4
98.8

0.0
1.5

0.0
1.5

0.2
1.5

0.3
1.5

0.3
1.5

0.2
1.5

Fiscal balance
Domestic revenue
External grants
Total expenditurec,dInternational poverty rate ($2.15 in 2017 PPP)c,dLower middle-income poverty rate ($3.65 in 2017 PPP)c,dUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)aSource: World Bank, IMF, and FGS. Emissions data sourced from CAIT and OECD.
Notes: e = estimate; f = forecast.
a/ GDP baseline estimates 2021-22 are by Somalia National Bureau of Statistics (SNBS, June 2023).
b/ Federal Government of Somalia (FGS).
c/ Calculations based on Takamatsu et al. (2022) “Rapid Consumption Method and Poverty and Inequality Estimation in Somalia Revisited.” Actual data: 2017. Nowcast:
2021–23. Forecasts: 2024–26.
d/ Projection using neutral distribution (2017) with pass-through = 1 (High) based on GDP per capita in constant LCU.

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SOUTH AFRICA
Table 1

2023

Population, million

60.5

GDP, current US$ billion

378.0

GDP per capita, current US$

6248.5International poverty rate ($2.15)

a

20.5
a

40.0

a

61.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

63.0

School enrollment, primary (% gross)

b

98.1

b

62.3

Total GHG emissions (mtCO2e)

580.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2017 PPPs.
b/ Most recent WDI value (2021).

South Africa’s economic growth slowed to
0.6 percent in 2023, undermined by constraints on products and input markets
and a broad-based decline in public service delivery (electricity supply, transportand logistics, public safety). As this weakgrowth trailed population growth, percapita income contracted by 0.4 percent.
The unemployment rate remains above 30
percent amid limited labor demand.
Ahead of general elections in May, the2024 Budget further extended social support introduced during the pandemic
while maintaining plans to stabilize debt.

Key conditions andchallenges
South Africa’s economy remains crippled
by multiple structural constraints, including electricity shortages, transport bottlenecks (ports and freight rail), and a highcrime rate. Reforms to address them continue to advance at a slow pace due todeclining state implementation capacity
and a lack of political consensus. Social
indicators remain dismal. Poverty is high– estimated at 62.7 percent in 2023 whenusing the upper-middle-income poverty
line – and inequality remains among thehighest in the world. Progress on extending access to basic services (such as water, electricity, and refuse collection) isstalling. Vulnerability to hunger has increased since the COVID-19 pandemic.
An estimated 12.9 percent of the population was at risk of hunger in 2022, despite the expansion of social grants.
In the absence of structural reforms, theimpact of fiscal policy on output (the fiscal multiplier) has been low and declining, reflecting inefficiencies in the allocation of resources and deteriorating state
capacity. Social spending has mitigated hardship, but weak job creation has
hampered progress in reducing poverty.
Higher public sector wages and transfers
to poorly performing state-owned enterprises have crowded out public investment, contributing to the erosion of thecountry’s public capital stock. Monetary
policy is sound, credible, and consistent

FIGURE 1 South Africa / Government financing

with the South African Reserve Bank’s
price stability mandate.
The political economy is complex.
Amid growing discontent with economic prospects and dismal public
service delivery, the African National
Congress (ANC) is set to face highly
contested general elections this year.
Hence, there is uncertainty around theeconomic policies the new government
will prioritize.

Recent developments
Real GDP growth slowed from 1.9 percent in 2022 to 0.6 percent in 2023. On
the spending side, private investment
in alternative energy supported growth,
but a drawdown on inventories andweak net export performance had a negative impact on growth. Domestic consumption remained constrained by poor
labor market outcomes and fiscal expenditure restraint. On the sectoral side,mining and manufacturing were affected by power outages and transport bottlenecks. The services sectors performed
better. Extreme weather events, including floods, severe storms, and droughts
in several provinces negatively affected
agricultural output and had significant
human and social costs.
The unemployment rate averaged 32.4
percent in 2023, with the rate for those
aged 15-34 at 44.9 percent. Even thoughmore jobs were created in 2023 – about
790,000 jobs – the pace of job creation is
not keeping up with the growing labor

FIGURE 2 South Africa / Actual and projected poverty rates
and real GDP per capita
Poverty rate (%)

Real GDP per capita (constant LCU)

70

82000

60

80000

50

78000

40
76000
30
74000

20

72000

10
0

70000
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Sources: National Treasury and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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force, resulting in rising numbers of unemployed people.
Consumer inflation, supported by soundmonetary policy and lower global commodity prices, declined from 6.9 percent
in 2022 to 6.0 percent in 2023. The South
African Reserve Bank left the key interest rate unchanged at 8.25 percent
since May 2023. Yet, high food and fuel prices disproportionately affected themost vulnerable people: the poorest 20
percent of households faced an inflation
rate of 9.3 percent.
The current account deficit widened from
0.5 percent of GDP in 2022 to 1.6 percent
of GDP in 2023, due to deteriorating
terms of trade (-4.8 percent in 2023),
and logistics constraints on exports. Lower global commodity prices for South
Africa’s key exports contributed to weaker fiscal revenue and, together with risingdebt-service payments and persistent
spending pressures, negatively impacted fiscal outcomes. The fiscal deficit
reached an estimated 6 percent of GDP
in 2023/24, and public debt reachedan estimated 73.9 percent of GDP overthe same period.

Outlook
Persistent structural constraints limit
South Africa’s economic potential. RealGDP growth is projected to average 1.3
percent over 2024-26, as energy sector reforms are expected to improve electricity
supply gradually. To accelerate the growthtrajectory, broad-based reforms and faster
implementation are urgently needed.
Inflation is expected to continue to decline,
easing the cost-of-living pressures onhouseholds. The labor market is expected
to remain weak, driven by subdued private sector activity, skills mismatches, andcumbersome labor regulations. This willtranslate into unemployment rates in theorder of 32 percent over 2024-26. The weaklabor market will continue to weigh on
households’ consumption and progress onsocial outcomes. The upper-middle-income poverty rate is projected to remain
high, at 62.5 percent in 2026.
Less favorable terms of trade and persistent transport bottlenecks are expected toweigh on external balances. The current

TABLE 2 South Africa / Macro poverty outlook indicators

account deficit is expected to widen to
2.8 percent of GDP in 2024 and to 3 percent of GDP by 2026. Nonetheless, it isprojected to remain financed by foreign
capital inflows.
The fiscal trajectory is projected to improve gradually over the medium term.
However, spending allocations remaintilted toward current expenditure. Public
capital spending is projected below 3 percent of GDP over 2024-26 due to limited
fiscal space. The government is planningto draw down about US$8 billion fromthe Gold and Foreign Exchange Contingency Reserve Account (GFECRA) – anaccount at the central bank recording foreign exchange valuation changes inrand–over the next three years to reduceits borrowing requirements, which is expected to translate into slower debt accumulation. Public debt is projected toreach about 78 percent of GDP in 2026.
However, pressures on public wages andstate-owned enterprises, the extension of
the COVID-19 social relief of distressgrant, persistently high interest rates, andhigh risks to growth and revenue could
put fiscal consolidation at risk.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
4.7
5.8
0.5
0.6
9.1
9.6

2022
1.9
2.5
1.0
4.8
7.4
14.9

2023e
0.6
0.7
2.1
4.2
3.5
4.1

2024f
1.2
1.4
-0.8
4.2
2.2
3.8

2025f
1.3
1.4
-0.3
4.0
2.5
3.0

2026f
1.5
1.4
-0.4
4.0
3.0
3.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

4.4
7.4
6.2
3.8

1.9
0.9
-2.5
3.4

0.6
-12.2
-0.1
1.3

1.2
12.7
0.3
1.1

1.3
2.0
1.1
1.3

1.5
2.0
1.6
1.4

Inflation (consumer price index)

4.5

6.9

6.0

4.9

4.5

4.5

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

3.7
9.7

-0.5
1.6

-1.6
2.0

-2.8
1.5

-3.0
1.5

-3.0
1.5

-4.6
27.8
67.8
-0.4

-3.6
28.2
70.9
0.9

-6.0
27.3
73.9
-1.0

-5.9
27.3
74.5
-0.6

-6.0
27.3
76.9
-0.6

-4.5
27.4
78.0
1.1

21.7
41.4
62.8

21.5
41.1
62.6

21.5
41.1
62.7

21.5
41.1
62.6

21.4
41.1
62.6

21.4
40.9
62.5

3.2
78.3

3.7
78.8

-1.1
78.4

0.7
78.4

1.0
78.4

1.4
78.4

a

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)b,cInternational poverty rate ($2.15 in 2017 PPP)b,cLower middle-income poverty rate ($3.65 in 2017 PPP)b,cUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ The Eskom debt-relief arrangement is reported above the line, in expenditures.
b/ Calculations based on 2014-LCS. Actual data: 2014. Nowcast: 2015-2023. Forecasts are from 2024 to 2026.
c/ Projection using neutral distribution (2014) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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SOUTH SUDAN
Table 1

2023

Population, million

11.1

GDP, current US$ billion

4.4

GDP per capita, current US$

392.8

International poverty rate ($2.15)

a

67.3
a

86.5

a

96.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

44.1

School enrollment, primary (% gross)

b

81.9

b

55.0

Total GHG emissions (mtCO2e)

73.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ Most recent WDI value (2021).

Better harvests and a partial recovery in
oil production following flooding-related
disruptions are lifting overall growth.
However, food insecurity and extreme
poverty remain high because of climate
and external shocks, declining official development assistance, structurally weak
governance, inadequate service delivery,and localized conflict. The conflict in Sudan presents acute risks to macroeconomic stability amid growing fiscal pressuresand pressing humanitarian needs; a lossof momentum in the political transition
could amplify these risks.

Key conditions andchallenges
A decade after independence, South Sudan’s development prospects remain constrained by fragility amid localized/intercommunal conflict. The 2018 peace agreement ended five years of civil war; however, the transition period needed for its
full implementation has been extended to2025. Oil accounts for nearly all exports
and about 90 percent of government revenues. Historic floods and the COVID-19
pandemic upended a modest economic
recovery in 2019.
International Monetary Fund (IMF)-supported reforms initiated since 2021 havehelped improve macroeconomic and pricestability and supported a recovery in the
non-oil private sector. Higher oil prices following the war in Ukraine have lifted fiscal
revenues, although expenditures have also
increased. Poverty remains dire, with 7 in
10 people living in extreme poverty. Some
8.9 million people, 78 percent of the population, face severe food insecurity, madeworse by higher global food prices anddomestic floods. In addition, 2 million
people are internally displaced (55 percent of whom are women and girls),
and 2.1 million remain refugees in neighboring countries. Since the start of theconflict in Sudan, over half a million
Sudanese refugees and returnees fromSouth Sudan have registered in the country, compounding already severe domestic
humanitarian needs.

South Sudan’s economy faces vulnerabilities, including its dependence on nonconcessional financing and limited fiscal
space to respond to adverse global oil
and food price developments. The conflict in Sudan presents acute macroeconomic risks if oil pipeline routes throughthe country are disrupted.
Implementing the 2018 peace deal andholding credible elections in December
2024 is essential for domestic peace andcontinued growth. Urgent implementationof macroeconomic, governance, and transparency reforms is necessary to ensure
scarce resources are spent on development
needs and to facilitate a sustainable andinclusive economic recovery. Reforms andinvestments are especially critical in agriculture, which supports livelihoods for 80
percent of the population; these will help
to support diversification away from theoil sector, create jobs, and build resilience
to climate change.

Recent developments
GDP growth contracted by an estimated
1.3 percent FY2022/23 due to a fourthconsecutive year of flooding that draggedon oil production and higher food inflation due to the war in Ukraine and thelingering impacts of the COVID-19 pandemic. Nevertheless, a sustained recovery in private sector activity is evident,
supported by improvements in macroeconomic stability due to reforms anchored by IMF programs, higher government spending enabled by a recovery in

FIGURE 1 South Sudan / Exchange rate developments

FIGURE 2 South Sudan / Actual and projected poverty
rates and real GDP per capita

SSP/USD
1400

Poverty rate (%)

Spread, percent
300

1200

3000

80

200

800

70

2500

60

2000

50

150
600
100

400

3500

90

250

1000

Real GDP per capita (constant LCU)

100

40

1500

30

1000

20

50

200
0
Oct-20 Apr-21 Oct-21 Apr-22 Oct-22 Apr-23 Oct-23
Spread (rhs)

Official XR (lhs)

500

10
0

0

0
2009 2011 2013 2015 2017 2019 2021 2023 2025

Parallel XR (lhs)

Sources: Bank of South Sudan and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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oil prices, an increased flow of credit tofirms, and a steady expansion in harvested areas as localized improvements inpeace and high crop prices encouraged
farmers to expand planting.
Inflation has increased significantly in recent months, rising from 13.3 percent in
2023H1 to 31.9 percent in January 2024 dueto the weakening currency. The onset ofthe conflict in Sudan and the recent Red
Sea crisis have impacted the oil revenue
flows, causing foreign exchange reserves
to drop from 0.5 months of import coverage in June 2023 to 0.2 months in December 2023. Amid increasing recourse to
deficit monetization, the official exchange
rate has depreciated by 42 percent since
the start of 2024, and the premium in parallel markets has widened to 13.7 percent.
Fiscal pressures proved more significant
than anticipated in FY2022/23. Higher oil
prices and non-oil revenue administration
reforms increased overall revenues by
42 percent. Expenses exceeded planned
outlays by 29 percent, with overall
spending increasing by 41.9 percent,mainly due to higher operational andcapital expenditures. The FY2023/24 budget further raised capital expenditures,increased public sector salaries by 130
percent to protect against the impacts ofinflation, and raised transfers to regions.

However, the government has accumulated salary arrears since the start of the fiscal year and reverted to deficit monetization. Data for FY24Q2 show continued
overdrafts at the central bank and the useof oil advances to finance the budget.
Public financial management reforms tostrengthen expenditure controls and cash
management have been initiated. However, there is limited transparency on oil revenues, including servicing of non-concessional external debt. South Sudan remains
at a high risk of both external and domestic
debt distress. Despite a good trade deficit,
the overall current account deficit has
gradually narrowed and shifted into asmall surplus due to large net transfers,
mainly remittances, reflecting increased
confidence in the economy following theexchange rate reforms.

Outlook
Growth is expected to rebound to 2 percent in FY2023/24, supported by a sustained recovery in the non-oil sector andexpanding crop planting. The recovery in
oil production from the impacts of flooding of oil fields has been partially offset
by a temporary decline in production and

TABLE 2 South Sudan / Macro poverty outlook indicators

exports in recent months. Over the medium term, growth should remain close to
4 percent as oil output levels recover andnon-oil activity improves, supported bymoderating inflation and higher government outlays on critical public investments, health, and education. This outlook
is predicated on prudent monetary and fiscal policies that anchor macroeconomic
stability, progress on governance, transparency, and structural reforms, and credible elections in 2024 that help to sustain
peace. The pressure on the current accountis expected to increase due to higher debtservice obligations, a decline in oil prices,
and a decline in international aid.
Extreme poverty is expected to remainstagnant at around 70 percent in the medium term as real growth prospects are limited. Addressing this reinforces the urgency of fiscal and public financial management reforms that generate budgetary
resources to increase social expenditures.
While efforts to modernize tax administration using digital solutions and to expand
the tax base could help, fiscal pressures are
expected to remain substantial given sizable debt-service obligations, a reductionin legacy arrears, and increasing social andhumanitarian expenditures. It is thus also vital to strengthen the management andtransparency of oil revenues.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices

2021
-5.1

2022
-2.3

2023e
-1.3

2024f
2.0

2025f
3.8

2026f
4.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-5.1
-4.0
-2.3
-9.7

-2.3
-1.8
-4.8
1.7

-1.3
-1.7
-4.3
3.6

2.0
1.7
0.5
4.1

3.8
2.8
3.3
4.7

4.0
3.0
3.0
5.6

Inflation (consumer price index)

43.1

22.0

18.0

35.0

22.0

12.4

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-5.5
0.9

-1.6
1.0

5.0
0.8

4.2
0.7

5.7
0.6

6.4
0.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.8
30.9
57.6
-4.4

-6.1
30.1
59.5
-4.0

1.9
30.6
42.9
3.0

2.0
32.0
36.9
2.7

2.0
31.8
32.4
2.8

1.9
31.5
27.5
2.6

67.5
86.6
96.7

68.8
87.6
97.1

69.5
88.0
97.2

70.1
88.3
97.3

70.0
88.2
97.3

69.9
88.2
97.3

2.1
2.7

0.8
2.7

0.9
2.7

1.3
2.7

1.4
2.9

1.5
3.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2016-HFS-W3. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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SUDANKey conditions andchallenges

Table 1

2023

Population, million

48.1

GDP, current US$ billion

109.3

GDP per capita, current US$

2272.5International poverty rate ($2.15)

a

15.3
a

49.7

a

86.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

34.2

School enrollment, primary (% gross)

b

77.8

b

65.3

Total GHG emissions (mtCO2e)

126.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2017 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2021).

Real GDP is expected to contract further
by 3.5 percent in 2024, after a 12 percent
contraction in 2023, driven by widespread destruction of productive capacity
due to the domestic conflict, and weak
private consumption and exports. Inflation averaged 230 percent in 2023, andthe currency has depreciated by 125 percent. The collapse of government institutions has disrupted public spending andthe exodus of people has reduced the tax
base. Poverty remains widespread, andfood insecurity is extremely high.

The armed conflict that erupted in April
2023 has caused severe and long-lastingdamage to the economy, the industrial base,education, and health facilities. It has also
led to a collapse in domestic demand andeconomic activity (including commerce, financial, and information and communications technology services) and is erodingstate capacity. Fighting has spread acrossthe country and reignited hostilities in traditionally restive regions, such as Darfur
and Kordofan. This in turn is impacting
agriculture and trade, and exacerbating
food insecurity and displacement.
Decreased local crop production seriously
threatens food availability. Direct fighting,displacement of civilians, and looting are
affecting farming and harvesting activities.
The conflict is also exacerbating challenges
linked to shortages of agricultural machinery, extremely high fuel prices, and scarcity of labor. Sudan faces extreme levels offood insecurity, with 17.7 million people(37 percent of the population) experiencing
acute food insecurity.
The currency has declined sharply against
the US dollar, depreciating to unprecedented levels given the high demand for foreign
currency in response to both the crisis andrelated damage to the banking and payment
systems. In particular, the electronic banking system stopped functioning for a time in
October 2023. Since then reports are thatbanking applications have operated on a

FIGURE 1 Sudan / Real GDP growth and sectoral
contributions to real GDP growth

limited basis. As of end-March 2024, the exchange rate stood at SDG 1150 in official
banks and SDG 1350 in the parallel market,
a stark contrast to the pre-war rates of SDG
580. Exports now take alternative routes toestablished channels due to decreased production. Smuggling has become common in
evading high duties, resulting in export revenues remaining outside Sudan’s official
banking system.

Recent developments
Amid the ongoing conflict, productive
capacity has suffered drastically, andboth private and government consumption have plummeted. Export volumes
shrank and major external financial support and investment has been cut off. As
a result, the economy is expected to contract for a seventh consecutive year in
2024, by 3.5 percent, after an estimatedcontraction of 12 percent in 2023.
Inflation has become more difficult tomonitor. Indications are that rents havesoared in safer areas, fuel costs havesoared across the country, and food prices
have risen sharply in areas of scarcity but
plummeted in pockets of oversupply as
people have fled and sold off their produce. Inflation is estimated to have risen to
about 230 percent in 2023. In 2024, Sudan
topped the International Rescue Committee
watchlist of countries most likely to experience a deteriorating humanitarian crisis.
The currency has significantly depreciatedby 94 percent in the official and 125 percent
in parallel markets since April 2023, and the

FIGURE 2 Sudan / Actual and projected poverty rates andreal GDP per capita

Percent2

Poverty rate (%)
100

800

0

90

700

Real GDP per capita (constant LCU)

80

600

-2

70

-4

60

500

50

400

-6

40

300

-8

30

200

20
-10
-12
-14

2018

2019

2020

2021

2022

100

10

Agriculture
Industry
Services
Gross value added at basic prices002009 2011 2013 2015 2017 2019 2021 2023 2025

2023 2024e 2025f 2026f

Sources: National Bureau of Statistics and World Bank staff calculations.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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premium between the parallel and official
rate has widened significantly, standing at
17.4 percent as of March 2024, compared to
1.7 percent in March 2023. This reflects a relativeincreaseindemandforUSdollarsamid
an increasingly unregulated exchange marketaswellasforeigncurrencyshortages.
The shock to the economy and public institutions, coupled with the disruption ofbudget execution has caused a contractionin spending and revenue. Despite theheavy costs of the conflict, spending declined, as the conflict caused a marked
drop in subsidies and wages. The large exodus of Sudanese and foreign nationals involved in commerce and business shrank
the tax base. Consequently, the fiscal deficit
is estimated at 3.5 percent of GDP in 2024.
The current account deficit is expected towiden to 6.9 percent of GDP in 2024 as
agricultural and mining exports were hit
by the fighting and both sides look to control productive assets. Sudan’s external position is undermined by considerable capital flight and disinvestment due to thehighly uncertain political outlook.

Outlook
The outlook remains highly uncertain. It
is based on a gradual cessation of conflictover the coming year; however, it remains
subject to large downside risks from prolonged conflict and tensions. Given theconflict-related economic losses and destruction of infrastructure, the economy isprojected to contract by 3.5 percent in 2024
and 0.7 percent in 2025. Inflation is forecast
to decline to 180 percent in 2024, reflecting
an adjustment of the base effect.
Modest economic growth is expected from2026, assuming the inflows of international
funding resumes. The economic recovery
is expected to be driven by the reconstruction of public infrastructure initially, assuming that the political upheaval begins
to ease and other macroeconomic fundamentals improve from 2026. The conflict ispredicted to lead to a drastic reduction ineconomic output across all major productive sectors, including mining, agriculture,

TABLE 2 Sudan / Macro poverty outlook indicatorsand oil. Gold mining and agriculture are
expected to be the main drivers of growth
after the conflict de-escalates.
With a gradual stabilization in the political and economic situation, inflation is projected to decrease further to
80 percent in 2025 and 45 percent in
2026. Sudan’s foreign currency shortages and currency depreciation are expected to persist throughout 2024-26,
as investment and other sources offoreign exchange, such as aid flows,slowly resume.
The fiscal deficit is expected to narrow
as revenue increases (in line with amodest recovery, assuming the conflictsubsides) from 2025 onwards, backed
by reconstruction efforts. The current
account deficit is expected to widen
throughout 2024-26, driven by an increase in the trade deficit, given highimport requirements (first, due to thewar and later to meet reconstruction efforts). This should be accompanied bya gradual recovery in domestic demand
and a partial recovery in exports.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
-1.9
-0.9
-9.6
-2.1
8.0
-0.5

2022
-1.0
-0.8
1.9
1.2
12.0
8.7

2023e
-12.0
-10.6
-36.5
-20.0
-32.0
-36.0

2024f
-3.5
-3.1
-14.0
-20.0
-20.0
-18.0

2025f
-0.7
-0.9
-4.9
-1.5
-9.0
-14.0

2026f
1.2
1.4
3.0
1.8
5.0
8.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-1.9
-0.6
-0.7
-3.9

-1.0
1.0
-0.7
-3.0

-12.0
-7.9
-11.6
-16.0

-3.5
-2.0
-3.0
-5.5

-0.7
1.1
-1.5
-2.0

1.2
1.1
1.0
1.6

359.7

164.2

230.0

180.0

95.0

60.0

-7.3
-1.6

-6.0
-1.3

-0.6
-0.7

-6.9
-0.9

-7.2
-0.7

-7.5
-0.5

-0.3
10.5
215.6
-0.3

-1.7
10.0
183.6
-1.4

-3.8
4.8
167.3
-3.7

-3.5
5.5
158.5
-3.5

-3.2
6.2
149.5
-3.2

-2.8
6.5
139.3
-2.8

25.0
62.2
91.2

26.9
63.8
91.8

34.5
71.0
93.8

37.4
73.7
94.4

39.0
75.0
94.7

39.6
75.5
94.9

1.1
17.6

-0.4
17.3

-1.9
15.5

0.0
16.6

1.7
18.0

2.5
19.6

Inflation (consumer price index)
Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)
Fiscal balance (% of GDP)
Revenues (% of GDP)a

Debt (% of GDP)
Primary balance (% of GDP)b,cInternational poverty rate ($2.15 in 2017 PPP)b,cLower middle-income poverty rate ($3.65 in 2017 PPP)b,cUpper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Debt projections do not include any restructuring achieved during the HIPC process.
b/ Calculations based on 2014-NBHS. Actual data: 2014. Nowcast: 2015-2023. Forecasts are from 2024 to 2026.
c/ Projection using neutral distribution (2014) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU.

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Key conditions andchallenges

Table 1

2023

Population, million

67.6

GDP, current US$ billion

79.2

GDP per capita, current US$

1170.8International poverty rate ($2.15)

a

44.9
a

74.3

a

92.3

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

40.5

School enrollment, primary (% gross)

b

95.5

b

66.2

Total GHG emissions (mtCO2e)

162.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Tanzania’s real GDP growth momentum
remained strong at 5.2 percent in 2023,
with low and stable inflation. While bothfiscal and current account deficit narrowed, the foreign exchange challenge
persists. Over the medium term, the economy is set to grow at around 6 percent,supported by increased private investments resulting from strengthening business environment. Major risks to the outlook are incomplete implementation of reforms, climate change, and deteriorationof global economy.

Tanzania’s economy has remained resilient
amid multiple shocks, but the current
growth pattern is not inclusive enough.
The impact of economic growth on poverty reduction is near-zero. Increasing reliance on public infrastructure investments
and a slowing structural transformation
since 2014 led recent growth to be concentrated in modern sectors that employ few
workers from poor households. Policies
designed to improve productivity andbuild resilience in Tanzania’s agricultural
sector—which produces just one-quarterof the country’s GDP and has employed
three quarters of the poor—could help facilitate structural transformation and reduce high and persistent poverty rates.
Diminishing role of Tanzania’s exports is
another key challenge. Tanzania’s export
to GDP ratio fell from 20.9 percent in 2012
to 14.3 percent in 2022. Main drivers behind the deteriorating export competitiveness are low productivity growth, hightrade costs, as well as other tariff and nontariff barriers. As a shrinking export volume will likely constrain growth in Tanzania and yield fewer foreign exchange earnings, the government should implement
steadfast reforms to crowd in private
investment (including FDI) and reduce
trade costs to strengthen the country’s export competitiveness. Priority policies include active engagements in the regional
free trade area, improving business climate

for private sector and productive jobs creation, as well as enhanced social protection, human capital, and skills.

Recent developments
Despite the spillovers from the climatechange, Tanzania’ economic growth accelerated to 5.2 percent in 2023, from 4.6 percent in 2022. The agriculture sector posted
low growth at 3.4 percent, due largely tofrequent droughts and floods, while thelow growth in industry of 3.9 percent wasdue to underperformance of construction
and water subsectors. Supported by buoyant economic activities in financial and insurance, transport and storage, and tradeand repair subsectors, the services sector
remained the main driver of the economy
and expanded faster by 7.3 percent in 2023.
Tanzania’s inflation continues to remain
low and stable at 3.0 percent in February
2024, thanks to eased global commodity
prices, reasonably rapid fiscal subsidies,and tightening monetary policies.
Both external and fiscal balances havemoderately improved. Bolstered by reduced domestic demand on imported
consumer goods, shrinking cost of oil
imports, and an uptick in tourism receipts, Tanzania’s current account deficit
has narrowed from 5.6 percent of GDP in
2022 to 3.8 percent in 2023. The improved
current-account position, combined with arelatively fast depreciation of Tanzania
shilling against US dollars during the second half of 2023, partly alleviated pressure
on the BoT’s foreign-exchange reserves.

FIGURE 1 Tanzania / Real GDP growth and sectoral
contributions to real GDP growth

FIGURE 2 Tanzania / Actual and projected poverty rates
and real GDP per capita

Percent, percentage points
7

Poverty rate (%)

690Real GDP per capita (constant million LCU)

100

2.5

80

5

2.0

70

4

60

3

50

1.5

40

2

1.0

30

1

20

0

10

2020

2021

2022

2023e

2024p

Agriculture
Services
GDP at constant prices

2025p

0.5

0

2026p

0.0
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Industry
Net taxes on production

Source: World Bank staff estimates and projections.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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Apr 24

However, the forex supply-demand imbalances persist, including a parallel foreignexchange market though the premium remains small. Between June and December
2023, Tanzania shilling depreciated by 7.8
percent against US dollars while gross reserves rose from US$5.2 billion (4.8 monthsof imports) to US$5.5 billion (4.5 monthsof imports). Fiscal deficit has narrowed to
3.8 percent of GDP in 2023 from 3.9 percent
in 2022 due to a combination of increased
domestic revenue mobilization and controlled expenditures. Meanwhile, the riskof external debt distress remains moderate.
Despite the shortages in US dollars, sugar, and electricity, the country is poised
to sustain a downward trend in poverty.
Poverty measured at the international
poverty line of $2.15 per day (2017 PPP)
is estimated to have dropped slightly
from 44 percent in 2022 to 43.5 percent in
2023. The reduction in extreme poverty
is accompanied by improvements in other non-monetary poverty measures, asevidenced by data from the 2022 Demographics and Health Survey, where
progress has been observed in several
SDG indicators, such as the reduction
in child stunting. Despite this progress,

challenges still loom; heavy rains experienced at the close of 2023, which hampered sugar cane harvesting, alongside
recent floods in Hanang district, underscore the country’s vulnerability to climate-related shocks. Climate shocks
strain an already fragile agricultural system, contributing to the escalation offood prices. Data from the National Bureau of Statistics, for instance, indicatesa 12 percent surge in food and non-alcoholic beverages prices since January 2022,
disproportionately impacting urban areas
where poverty is on the rise, particularly
in Dar-es-Salaam.

OutlookReal GDP is projected to grow at 5.6 percent in 2024 and its long-run potentialof about 6 percent in the medium term,
supported by improving business environment and the steadfast implementation of structural reforms. The current
account deficit is set to narrow further
to 3.3 percent in 2024 because of the
improved trade balance, supported by

TABLE 2 Tanzania / Macro poverty outlook indicators

rapid growth of gold, services, and manufactured exports. Increasing FDI inflows
and concessional external borrowing willcontinue to fund the current accountdeficit and help keep official gross reserves at an adequate level. The fiscal
deficit is projected to decline to 3.6 percent in 2024 and near 3 percent in themedium term. This is on account of expected higher tax revenue collections as
business climate improves and stabilized
total expenditures. The financing sourcesof the narrowing fiscal deficit are bothforeign and domestic loans.
The mains risks to the macro-economic
outlook include incomplete implementation of structural reforms particularly
those related to boosting private sector, theintensifying impacts of climate change onfood security and tourism sectors, and ongoing geopolitical tensions.
Projections suggest a continued decreasein the poverty rate, anticipated to decline
from 42.4 percent in 2025 to 41.7 percent
in 2026. This downward trajectory is supported by a promising macroeconomic
outlook and an agriculture budget aimed
at unlocking productivity through promoting the intensification of agriculture.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
4.3
2.3
9.0
7.8
5.2
9.6

2022
4.6
4.6
8.4
9.6
10.2
23.7

2023e
5.2
2.2
3.1
3.8
17.4
2.3

2024f
5.6
2.9
7.7
6.2
9.3
4.2

2025f
6.0
3.5
10.3
6.9
6.3
4.1

2026f
6.4
3.1
5.2
9.4
9.1
6.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

4.3
3.7
4.1
4.8

4.6
3.8
4.3
5.3

5.2
3.4
3.9
7.3

5.6
3.8
5.6
6.7

6.0
4.8
6.2
6.5

6.4
5.5
6.3
7.1

Inflation (consumer price index)

3.7

4.3

3.8

3.4

3.2

3.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-3.2
1.6

-5.6
1.7

-3.8
1.8

-3.3
2.3

-3.2
2.6

-3.0
2.8

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-3.8
14.5
42.0
-2.1

-3.9
15.3
43.6
-2.1

-3.8
15.8
42.2
-1.6

-3.6
16.2
41.0
-1.5

-3.4
16.5
39.7
-1.5

-3.1
16.7
37.3
-1.3

44.3
73.9
91.7

44.0
73.6
91.4

43.5
73.3
90.9

43.0
72.8
90.4

42.4
72.4
89.8

41.7
71.9
89.2

1.3
11.1

0.6
10.9

0.8
10.9

1.1
11.0

1.2
11.0

1.2
11.1

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2013- and 2018-HBS. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on GDP per capita in constant LCU.

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Apr 24TOGO

Key conditions andchallenges

Table 1

2023

Population, million

9.1

GDP, current US$ billion

9.1

GDP per capita, current US$

1008.3

International poverty rate ($2.15)

a

26.6
a

58.8

a

86.8

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

37.9

School enrollment, primary (% gross)

b

122.5

b

61.6

Total GHG emissions (mtCO2e)

10.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2022); Life expectancy(2021).

Growth is projected to moderate in 2024
before picking up again in 2025-26, albeit at a slower-than-expected pace reflecting a deteriorated external environment including ECOWAS uncertainties,
and ongoing fiscal consolidation efforts.
As growth strengthens, the extreme
poverty rate should decline to 21.5 in
2026, down from an estimated 25.8 in
2023. Risks of regional instability, financial turbulence, and climate pressures callfor resilience-enhancing reforms combined with prudent fiscal policies.

Growth has been resilient to a sequence ofshocks since the COVID-19 pandemic, butvulnerable populations have been adversely impacted by elevated inflation, while
significant rural-urban disparities in economic opportunities and access to basic
services continued to hamper progress in
reducing poverty and inequality. A strong
fiscal response explains a significant partof the economic resilience in recent years
but contributed to bringing public debt torecord high levels, averaging 63.0 percent
of GDP in 2020-22. Amid tighter financing
conditions, rising debt service costs, andgrowing regional uncertainty, developing
a well calibrated fiscal consolidation strategy that preserves priority investments andcritical social spending, and privileging external concessional financing over more
expensive regional borrowing have become increasingly urgent. Mobilizing private investment, including for infrastructure development and in agriculture, could
help boost growth and the welfare of mostvulnerable and poorer populations while
fiscal space is being restored.

Recent developments
Despite a series of unprecedented shocks,
Togo maintained a robust 4.8 percent average growth rate over 2020-23, equivalent

to real income per capita gains of 2.4 percent per annum. Growth is estimated tohave moderated to 5.4 percent in 2023, reflecting weakness among key trading partners and a retrenchment in public spending as part of initial consolidation efforts.
While the extreme poverty rate (at $2.15
2017 PPP) dropped to 26.6 percent in 2021,
from 28.4 percent in 2018, the actual number of extreme poor increased. Moreover,
the rural-urban gap in welfare remained
persistently high, with 41.3 percent of therural population facing extreme poverty in
2021, compared to an urban rate of just 7.1
percent. Since 2021, rising inflation impacted households’ purchasing power, and despite sustained economic growth andhigher agricultural incomes, extreme
poverty remained nearly constant at 26.7
percent in 2022, dropping slightly to 25.6
percent in 2023. This slow poverty reduction coupled with faster population
growth led to about 40,000 additional extreme poor between 2021 and 2023.
The fiscal deficit remained elevated at 6.6
percent of GDP in 2023 but narrowed froma three-decade high of 8.3 percent in 2022.
The improvement resulted from lower
transfers and subsidies, restrained goods
and services expenditure, and increased
revenues. However, elevated security
spending and new economic and social infrastructure investments prevented fasterconsolidation, causing the debt-to-GDP ratio to further increase to 67.2 percent of
GDP. Regarding monetary policy, the Central Bank of West African States (BCEAO)
raised policy interest rates by a cumulative
150 basis points since mid-2022 (to 3.5 percent for liquidity calls and 5.5 percent for

FIGURE 1 Togo / Real GDP growth and fiscal balance

FIGURE 2 Togo / Actual and projected poverty rates andreal GDP per capita

Percent
7

Poverty rate (%)

Percent of GDP
4

6

Real GDP per capita (constant LCU)

100

70000090

2600000

80

5

0

4

-2

70

50000060

400000

50

3

-4

2

-6

1

-8

0

-10
2010

2012

2014

2016

Fiscal balance (rhs)

2018

2020

UTB recap.

2022

2024

300000403020000020

10000010
002011 2013 2015 2017 2019 2021 2023 2025

2026

Real GDP growth

Source: World Bank.
Note: World Bank projections start in 2023.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

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90

Apr 24the marginal lending facility) but inflationin the region remained above the 1-3 percent target range and foreign exchange reserves dropped further to 3.5 months ofimports in 2023.

OutlookWith global demand remaining subdued
in 2024 and fiscal consolidation measuresintensifying, growth in Togo is projected
to slow to 5.1 percent in 2024 (2.8 percent
per capita terms), before graduallystrengthening to 5.4 percent in 2025 and 5.6
percent in 2026. While slower than initially
expected due to faster fiscal consolidation
and regional uncertainties, growth will besupported by domestic demand with ongoing and planned private investment projects and a recovery in consumer spending
as inflationary pressures taper. Exports
will provide an additional boost from 2025
as the global economy regains somestrength while public investment should

regain momentum from 2026 as fiscal consolidation ends. Ongoing reforms should
help support agriculture productivity andboost private investment. The announced
exit of Mali, Niger, and Burkina Faso fromECOWAS is expected to lead to relatively
modest trade disruptions in the short term
but is heightening regional uncertainty,
which could weigh on investment sentiment, notably around the development of
the Lome-Ouagadougou-Niamey economic corridor. The BCEAO may need to continue tightening monetary policy in 2024
to bring inflation under control and prevent further declines in foreign reserves.
Poverty is projected to moderate gradually
in 2024 and 2025, and more substantially in
2026, to reach 21.2 percent.
In line with the fiscal framework agreed in
the context of the new IMF program and
WEAMU commitments, the fiscal deficit isexpected to decline to 4.5 percent of GDP in
2024 (excluding the one-off effect of the recapitalization of the state-owned bank UTBamounting to 1.6 percent of GDP) and 3.0
percent in 2025 driven by a drop in capital

TABLE 2 Togo / Macro poverty outlook indicators

spending and transfers on the expenditureside, and by tax and customs reforms andthe rationalization of tax exemptions on
the revenue side. The government faces
difficult tradeoffs in its fiscal consolidation
strategy to minimize disruptions to priority investments and public services.
The growth outlook is subject to multiple
downside risks. Longer lasting disruptions
to global trade, commodity, and financial
markets following a sequence of unprecedented shocks in recent years could havea significant knock-on effect on a small,open, and relatively indebted economy
like Togo. A disorderly exit of Mali, Niger,
and Burkina Faso from ECOWAS, and possibly from WAEMU, could lead to financial
market instability in the short term andtrade dislocations over the medium term.
Additional downside risks stem from rising insecurity in the North that could
weigh on investment, trade, and public finances, as well as climate shocks that negatively impact agricultural productivity. Finally, reforms could stall and hamper confidence in Togo’s development trajectory.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.0
9.9
0.2
-0.2
5.3
6.9

2022
5.8
1.3
8.8
26.4
-1.1
5.1

2023e
5.4
4.8
5.6
7.2
4.2
3.8

2024f
5.1
6.0
3.1
4.4
4.9
4.3

2025f
5.4
5.9
6.1
3.7
6.4
5.0

2026f
5.6
5.8
5.9
4.8
6.8
5.4

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

5.3
3.4
5.7
5.9

6.2
5.0
7.3
6.2

5.3
5.1
7.1
4.6

5.0
4.1
6.4
4.8

5.4
4.5
6.8
5.1

5.6
4.2
6.9
5.5

Inflation (consumer price index)

4.5

7.5

5.3

3.5

3.0

2.7

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-0.9
0.3

-3.0
0.3

-3.3
0.4

-3.4
0.4

-3.0
0.5

-3.0
0.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-4.7
17.1
63.0
-2.5

-8.3
17.6
65.8
-5.9

-6.6
17.8
67.1
-4.5

-6.2
18.1
68.8
-3.8

-3.0
17.9
67.0
-0.5

-3.0
18.0
65.0
-0.7

26.6
58.8
86.8

26.7
58.7
86.8

25.8
57.2
85.8

24.5
55.6
84.9

22.7
53.5
83.7

21.5
50.9
82.7

6.4
25.7

5.4
26.9

2.9
26.4

4.0
26.4

4.4
26.4

1.2
20.2

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

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Apr 24UGANDAKey conditions andchallenges

Table 1

2023

Population, million

48.6

GDP, current US$ billion

42.0

GDP per capita, current US$

864.3

International poverty rate ($2.15)

a

42.1
a

71.8

a

91.1

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

42.7

School enrollment, primary (% gross)

b

105.5

b

62.7

Total GHG emissions (mtCO2e)58.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2017 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2021).

Continued investment momentum, lower
inflation, and improved global supply
conditions have supported a modest acceleration of GDP growth expected at 6.0
percent in FY24. A sustained fiscal consolidation will yield a primary fiscal surplus of 0.2 percent of GDP in FY26 andease pressure on debt. GDP growth will
accelerate beyond 6 percent in
FY25–FY26, if not derailed by a global
slowdown, disruptions to oil production,
and weather shocks. Poverty will fall as
incomes recover.

Increased shocks and less momentum behind policy reform create challenges forsustaining economic growth and reducing
poverty in Uganda. Rapid population
growth has kept a large share of the population below the poverty line, while humancapital and infrastructure deficits have
limited the country’s growth potential andsocial welfare improvement. The challengeof creating productive jobs for the almost
one million working age Ugandans entering the labor market every year is enormous. Although services constitute a large
share of GDP, it has created a few jobs,
mainly informal and low-skilled. Most of
the jobs are in the agriculture sector which
is prone to natural disasters that climatechange is making more frequent and severe—and adapting to which is hampered
by low adaptive capacity.
To promote economic growth and reducepoverty over the medium term, the Ugandan economy needs to structurally transform and shift labor into a more productive employment, ahead of oil revenue
flows. The first required reform is to shift
investments towards the private sector by
reducing the cost of doing business andfostering access to finance. Second, thegovernment must invest more strongly inhuman capital by shifting spending intosocial sectors, alongside measures to reduce inequality and strengthen resilience,and promoting uptake of digital and other

FIGURE 1 Uganda / Fiscal adjustment

Percent of GDP
20

innovative technologies. Finally, is tomaintain prudent macroeconomic management alongside structural policies toavoid the ‘Dutch’ disease and to build resilience to climate shocks.

Recent developments
Economic growth accelerated slightly to an
estimated 6.0 percent in FY24 despite external shocks. The Uganda Bureau of Statistics
estimates that GDP grew by 5.3 percent during the first quarter of FY24. The industrial
sector grew by 11.9 percent during this period, thanks to an oil-related construction
boom as FDI grew over 56 percent. Agriculture, too, accelerated despite volatile weather conditions. An uptick in private investments and employment growth reinforced
domestic demand deeper into the year - despite a slight reduction in February 2024 to
51.7, Uganda’s Purchasing Managers’ Index
has for the sixteenth consecutive month signaled a strengthening of private sector activity, with sustained increases in output, neworders, and employment. While Uganda’s
exports surged with increased volumes of
production and improvement in terms oftrade, resumption of gold trade, and recovery of tourism, imports grew stronger, supported by demand from oil investments.
The Bank of Uganda (BoU) tightenedmonetary policy in March 2024 to curb
possible passthrough of a fast-depreciating shilling. Low inflation, averaging 2.9
percent during the first half of FY24 benefitted both investments and the poor
households. During the second half of

FIGURE 2 Uganda / Actual and projected poverty rates andreal private consumption per capita
Poverty rate (%)

Percent of GDP
60

15

40

5

30

0

20

-5

10

2.5

90

50

10

Real priv cons per capita (constant mil. LCU)

100
80

2.0

70
60

1.5

50
40

1.0

30
20

0.5

10

-10

0
2019

2020

2021

2022

Public debt (rhs)
Domestic revenue (lhs)

2023

0

2024e 2025f 2026f

0.0
2009 2011 2013 2015 2017 2019 2021 2023 2025

Primary balance (lhs)

Source: Ministry of Finance, Planning and Economic Development.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

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Apr 24

FY24, inflation increased – gradually to 3.4
percent in February 2024, but forecast toaccelerate towards the target of 5 percent
as the Ugandan currency depreciated due
to intensified portfolio outflows. Hence, on
March 6, 2024, BoU raised its policy rate
to 10 percent, from the 9.5 percent maintained since August 2023.
The fiscal consolidation has steadily reduced the primary fiscal deficit, estimated at
0.6 percent of GDP in FY24. While challenged by persistent shortfalls, estimated atabout 12 percent below plans during the seven months to January, government revenues
share in GDP continued to increase. The
shortfall has been partially offset by underspending due to cuts and delays in the development projects, which may have implications to growth. The fiscal deficit was mainly
financed through external borrowing.
Consistent with accelerated economic
growth and low inflation, household perceptions on current and future economic
wellbeing are positive. According to the October/November 2023 phone survey, respondents also experienced improved access to essential products. Nevertheless,about 41 percent of households continued
to be moderately food insecure and four
percent were severe food insecure. About
40 percent respondents were certain toexperience extreme weather events during
next 12 months with higher negative expectations among respondents from thepoorest Northern and Eastern regions.

OutlookReal GDP growth is expected to accelerate
to 6.6 percent by FY26, mainly driven by
investments in the oil sector. With the progressed preparation of the Tilenga andKingfisher drilling project areas, supportive infrastructure (including Kabaale airport), and the pipeline construction, oil exports are expected to commence by end of2025. However, timing may slip if the 60
percent of the pipeline financing, anticipated from external creditors, delays. The investments and exports of oil will support
government’s other promotion efforts fortourism, export diversification, and agroindustrialization. Lower inflation will enable BOU to ease its stance, which combined with reduced fiscal pressures undera fiscal consolidation, augurs well for bothforeignanddomestic
investment.
Nonetheless, the slowdown of global
growth and disruptions in global financial
conditions remain major downward risks.

TABLE 2 Uganda / Macro poverty outlook indicators

The primary fiscal balance is expected to
evolve into a surplus of 0.2 percent of GDP
by FY26, through more efficient spending
and implementation of the Domestic Revenue Mobilization Strategy. This fiscal consolidation aims to continue reducing nonpriority capital expenditures while maintaining the share of social spending, crucial
especially to poor households. Rationalization of exemptions and revenue administration modernization to improve compliance are expected to yield revenues of approximately 0.5 percent of GDP in FY25.
The reduction in the fiscal deficit will modestly reduce debt below 50 percent of GDP
through 2026, keep debt service manageable, and reduce crowding out of private
sector investment.
Accelerated growth may reduce poverty(measured at the $2.15/day international
poverty line) from 41.3 percent in 2024 to
40.1 percent by 2026. But given that households have limited adaptive capacity, thepace of poverty reduction will ultimately
depend on how food access and affordability evolve, and on the incidence of weather
and any environmental shocks. The trickle-down effect of oil for the poor will depend on adopting the right set of policies
and strengthening existing and setting up
new institutions.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
3.4
4.2
6.1
5.1
2.6
8.6

2022
4.7
3.4
-17.4
20.1
-18.6
-8.9

2023e
5.2
4.4
18.3
1.8
7.0
3.2

2024f
6.0
5.4
2.0
9.5
7.7
8.6

2025f
6.2
5.8
-3.7
10.6
8.3
8.7

2026f
6.6
5.6
5.3
9.9
8.4
8.8

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

3.4
3.8
3.4
3.3

4.7
4.4
5.4
4.4

5.2
4.8
3.8
6.2

6.0
4.9
6.2
6.4

6.2
5.0
6.5
6.6

6.6
5.1
6.5
7.4

Inflation (consumer price index)

2.5

3.7

8.8

3.1

4.5

5.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-10.2
2.1

-7.9
3.1

-8.2
5.9

-8.1
8.7

-7.4
10.9

-6.9
9.9

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-9.5
14.7
49.6
-6.8

-7.4
14.2
50.7
-4.6

-5.5
14.4
49.1
-2.3

-3.9
15.8
48.5
-0.6

-3.7
16.1
47.8
-0.3

-3.1
17.7
41.9
0.2

42.2
71.7
90.9

42.1
71.8
91.0

41.8
72.0
91.5

41.3
72.4
92.3

40.7
72.8
93.2

40.1
73.2
94.1

3.2
15.5

3.1
16.2

3.2
17.2

3.4
18.1

3.4
18.9

3.6
19.7

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2016-UNHS and 2019-UNHS. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026.
b/ Projection using point-to-point elasticity (2016-2019) with pass-through = 0.7 based on private consumption per capita in constant LCU.

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ZAMBIAKey conditions andchallenges

Table 1

2023

Population, million

20.6

GDP, current US$ billion

26.4

GDP per capita, current US$

1283.5International poverty rate ($2.15)

a

64.3
a

81.0

a

93.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

51.5

School enrollment, primary (% gross)

b

94.8

b

61.2

Total GHG emissions (mtCO2e)93.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2022), 2017 PPPs.
b/ Most recent WDI value (2021).

Despite a protracted debt restructuring
process and subdued copper production,
Zambia’s economy has been recovering
since the COVID-19 recession, primarily
driven by firmer services. In Q3:2023, real GDP grew by 5.0 percent year-to-dateand 5.1 percent y/y. In 2024, a severe
drought affecting agriculture, electricity,
and water supply will significantly dampen growth; however, an anticipated upturn in mining may offset some of the
agricultural losses. Still, Zambia needs tofinalize debt treatments to strengthen the
response to drought and other shocks.

Zambia is a country with vast natural resources seeking to exploit economic opportunities to improve livelihoods by reducing poverty and inequality, which are
high. The vast mineral resources (mainly
copper) have been exploited with little value addition and employment creation,
making growth and revenues volatile andcontributing little to inclusive growth. The
mainstay agriculture sector, which employs most of the workforce, remains undiversified and has low and declining productivity, exacerbating socio-economic development challenges. The 2023/24 rainyseason’s drought, worsened by climatechange, has led to massive crop failure anddamage, affecting food security and livelihoods of 6.6 million people in 84 out of
116 districts. The diminished water supply
constraininghydroelectricity
generation—the dominant power source—is expected to result in up to a 1000 megawatts
annual deficit, disrupting business, especially among most small and medium enterprises, as blackouts intensify.
Meanwhile, the current administration
continues to pursue bold fiscal and structural reforms to restore macroeconomic
stability, reinvigorate growth, and increase
pro-poor spending since 2022. These reforms followed a decade of unbalanced
fiscal expansion and unsustainable debt
accumulation that worsened distortions
and growth potential. Despite challenging

domestic and external environments, they
have supported economic recovery fromthe multiple and compounding crises
which started in 20220. Still, maintaining
macroeconomic stability remains challenging due to uncertainty caused by protracted debt restructuring and declining mining performance over the past three years.
The recent contraction in the mining sector
starting in 2021 has triggered a deterioration in the external sector balances andsoftened fiscal revenues, leading to large
currency depreciation, high inflation, anda sharp increase in the cost of living. With
the government’s capacity to finance development significantly constrained, completing debt treatment would give
breathing space for Zambia to restore
macroeconomic stability and debt sustainability and support the administration's ambitious reform program.

Recent developments
Real GDP grew by 5.0 percent year-to-dateand 5.1 percent y/y in Q3:2023, driven by
firmer services in transport, informationand communications, and hospitality. Copper production remained below potential,
declining by 8.0 percent (y/y) due to legacy
operational difficulties at Mopani Copper
mines and Konkola Copper Mine (KCM).
This negatively impacted exports, with export earnings declining amid heightened
uncertainty arising from protracted debt restructuring, severely weakening Zambia’s
external balances. The current accountslipped into deficit in 2023—the first time in

FIGURE 1 Zambia / Selected macroeconomic indicators

FIGURE 2 Zambia / Actual and projected poverty rates andreal GDP per capita

Percent
35

Poverty rate (%)

Exchange rate
30

30

8400

90

8200

80

8000

20

70

7800

15

60

7600

50

7400

10

40

7200

5

30

7000

20

6800

10

6600

25

25
20
15
10
5

0
0
Feb-20 Aug-20 Feb-21 Aug-21 Feb-22 Aug-22 Feb-23 Aug-23 Feb-24
6-8% target band
Food inflation
BOZ policy rate

Real GDP per capita (constant LCU)

100

0

6400
2010

Headline inflation
Non-Food inflationexchange rate (zmw/$)

2012

2014

2016

2018

International poverty rate
Upper middle-income pov. rate

Source: World Bank estimates.

Source: World Bank. Notes: see Table 2.

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2020

2022

2024

2026

Lower middle-income pov. rate
Real GDP pc

four years. The exchange rate depreciatedby 41.8 percent against the US$ in 2023, savefor short-lived appreciations in March andJune around the news of expected breakthroughs in debt restructuring.
The sustained exchange rate depreciation
and a food price shock (due to a grain
deficit in the region) placed pressure on
domestic prices. Both food and non-foodinflation picked up, leading to a broadbased increase in headline inflation from
9.9 percent (y/y) in December 2022 to 13.5
percent in February 2024, against the 6–8
percent target range. Bank of Zambia(BoZ) raised the policy rate by 200 basis
points (cumulatively) in 2023, with half of
the increase in November amid intensifying inflationary pressures and currency
depreciation. On February 14, 2024, theBoZ hiked the policy rate by an additional
150 basis points to 12.5 percent. It also
raised the statutory reserve ratio from 9.0
percent in January 2023 to 26.0 in February
2024 to moderate FX demand and auctioned more than US$50 million in the interbank market, triggering a temporary exchange rate appreciation of 13.8 percent.
The government continued the fiscal consolidation launched in 2022, achieving a primary fiscal surplus estimated at 0.2 percent of
GDP in 2023, despite underperforming

revenues due to mining contraction. Higher non-tax revenues, better collection
from non-mining, and higher grants
from the development partners boosted
overall revenue.

Outlook
A severe drought in the current rainyseason and cholera epidemic (with 20,577
cases and 699 deaths by end-February),
which delayed the opening of schools,
will significantly dampen growth to 2.7
percent in 2024. The government declared the drought a national disasteron February 29, 2024, and called for an
emergency response. Although crop failure estimates are still preliminary, theysuggest more than half of the plantedarea is damaged, directly affecting private consumption. Despite the rationingof electricity to cushion real sector activity, especially in the mines and criticallife support services, the power deficit
is slowing down aggregate industry andservices production. However, the mining sector is expected to recover in 2024
and stimulate growth in industry, exports, and services activities that support

TABLE 2 Zambia / Macro poverty outlook indicators

mining. This anticipated production improvement stems from a less wet rainyseason for open pit mining and the resolution of legacy operation challenges
leading to the potential realization ofsignificant pledged foreign direct investment (FDI). Still, tight monetary policy
and elevated net domestic financing to
the government will likely constrain
credit availability to the private sector
due to higher borrowing costs.
There is substantial uncertainty surrounding the forecast. Firmer-than-expected copper prices would boost external sector performance and potentially reverse currency
depreciation. Finalizing a debt restructuring deal would boost portfolio flows. Still,downside risks are considerable. Copper
revenues may undershoot because of lower ore grades, delayed investments in the
sector, and weakening copper prices. The
effects of climate change pose a risk interms of food security and hydropower
generation. There could be additional inflationary pressures from exchange ratepass-through effects and climate-induced
events such as food shortages. Subdued
global growth due to the contraction ofChina’s economy, the primary market for
Zambia’s copper exports, could dampen
growth at home.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
6.2
8.0
5.6
4.7
4.6
2.5

2022
5.2
6.0
2.8
5.0
5.0
4.0

2023e
4.0
4.6
9.1
6.0
2.2
4.5

2024f
2.7
0.5
12.3
6.0
2.6
3.5

2025f
6.1
6.7
8.0
7.0
3.5
4.0

2026f
5.9
5.7
9.5
6.6
4.0
4.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

6.4
6.9
7.1
6.0

5.5
-11.0
-2.2
12.1

3.9
10.0
-1.7
6.1

2.7
-20.0
1.8
5.7

6.1
2.0
3.8
7.4

5.9
2.0
5.0
6.6

Inflation (consumer price index)

22.1

11.1

11.0

14.3

10.1

7.0

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

9.7
3.7

3.7
1.5

-0.4
1.5

0.2
3.0

0.4
3.8

0.6
3.4

Revenues (% of GDP)
Primary balance (% of GDP)

22.4
-2.0

20.4
-1.5

21.1
0.6

21.6
0.2

20.6
1.6

20.9
0.8

..
..
..

64.3
81.0
93.2

64.0
80.8
93.1

64.0
80.8
93.1

63.2
80.2
92.8

62.4
79.6
92.5

0.5
9.9

0.8
10.3

1.2
11.0

1.4
11.9

1.4
12.9

1.4
13.9

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2022-LCMS-VIII. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2022) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU.

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Key conditions andchallenges

Table 1

2023

Population, million

16.7

GDP, current US$ billion

33.5

GDP per capita, current US$

2012.0International poverty rate ($2.15)

a

39.8
a

64.5

a

85.0

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a

50.3

School enrollment, primary (% gross)

b

96.0

b

59.3

Total GHG emissions (mtCO2e)115.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2017 PPPs.
b/ Most recent WDI value (2021).

GDP growth is projected to slow to 3.3
percent in 2024 after a solid post-pandemic recovery in 2022-23. While a slowdown was expected, the growth is further
affected by persistent macroeconomic instability with high inflation and exchange
rate distortions, an El Niño-relateddrought, and projected lower export
prices. The fiscal deficit is expected to increase due to the transfer of RBZ’s external liabilities to the treasury. Drought
conditions will affect agricultural output and increase food insecurity and,potentially, poverty.

Zimbabwe’s economic performance ishampered by continued macroeconomic
instability and power shortages. High inflation, exchange rate distortions, and adifficult business environment raise thecost of doing business, which in turn areleading to underinvestment, a rise in informal activity, and erosion of the fiscal revenue base. Jointly, this significantly undermines the economy’s long-term
growth prospects. The investment climate
is further hampered by inadequate electricity supply with power shortages estimated to cost Zimbabwe 6.1 percent of
GDP per annum.
Zimbabwe’s external debt has rapidly increased in recent years, driven by externalarrears and legacy debt. External debt has
risen from US$9.5 billion in 2018 to
US$17.5 billion in 2023 (an estimated increase from 26 to 95 percent of GDP). The
increase is driven partly by debt arrears as
the GoZ stopped servicing external debt in
2000, and Zimbabwe’s external arrears accumulated to US$6.9 billion in 2023 mostly
to IFIs. The government is implementing
arrears clearance and debt resolution strategy that is critical for debt resolution andaccess to financial support. As part of this,Zimbabwe also resumed token payments
to multilateral creditors in 2021.
Poverty has been elevated, on account ofcontinued macroeconomic instability, poor
job creation in the productive sectors,

FIGURE 1 Zimbabwe / Exchange rates

weather and global health shocks, and aweak social protection system. The national extreme poverty rate has declined fromits 2020 post-pandemic peak of 49 percent
to 43 percent in 2022. Yet, poverty and vulnerability remain high, against a background of cyclical agricultural production,
climate shocks, and elevated food prices.

Recent developments
Driven by post-pandemic recovery, Zimbabwe was one of the fastest-growing
SADC economies in 2022 and 2023. RealGDP is estimated to have grown by 5.5 in
2023, after a 6.5 percent growth in 2022,
on the back of an expansion in agriculture,mining, and remittances-induced services
growth. Nevertheless, macroeconomic
volatility fuelled by monetary instability
and substantial exchange rate distortions
continues to keep Zimbabwe’s economic
activity below its potential.
Inflationary pressures remain high in 2024
as local currency depreciation intensified.
Annually inflation increased for the fourthconsecutive month in February 2024, reflecting sharp depreciation of the local currency at both official and parallel foreignexchange market. Annual inflation increased from 26.5 percent in December
2023 to 47.6 percent in February 2024. The
official exchange rate has depreciated by
788 percent in 2023 with the parallel market premium estimated at 30 percent as ofFebruary 2024. Meanwhile, the Minister ofFinance announced a possible move to a
currency board, but details are lacking.

FIGURE 2 Zimbabwe / Actual and projected poverty rates
and real GDP per capita
Poverty rate (%)

Real GDP per capita (constant LCU)

100

16000

90

14000

80

12000

70
60

10000

50

8000

40

6000

30

4000

20

2000

10
0

0
2011

2013

2015

2017

2019

International poverty rate
Upper middle-income pov. rate

Sources: Zimstat and World Bank staff estimates.

Source: World Bank. Notes: see Table 2.

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2021

2023

2025

Lower middle-income pov. rate
Real GDP pc

Fiscal pressures increased in 2023 ahead ofnational elections and the transfer of RBZ’s
external liabilities to the treasury. The government increased civil servants’ salaries
sharply, both in foreign and local currency.
The Treasury took over the servicing ofdebt of US$1.8 billion in external liabilities
from RBZ. Meanwhile, some of the revenue proposals in the 2024 budget has
been reversed, casting doubt on the credibility of the budget. Nevertheless, the implemented taxes like sugar tax have led to
an increase in prices.
The current account surplus narrowed in
2023, as remittances from non-governmental organization contracted. Nevertheless,the trade deficit was slightly lower in 2023
compared to 2022. Exports increased by 9.7
percent year-on-year, driven by tobaccoand diamond. Imports increased by 6.4
percent driven by fuel and maize imports.

OutlookReal GDP growth is projected to slow further to 3.3 percent in 2024, partly reflecting

the impact of structural bottlenecks,
macroeconomic instability (high inflationand severe exchange rate volatility), an El
Niño-related drought, and lower commodity prices. El-Nino induced drought willaffect most rain fed crops and may intensify electricity supply shortages. Nevertheless, continued increase in remittances will
help to stimulate growth in services(wholesale and retail trade), and construction. Risks are titled to the downside andinclude geopolitical tension, a weak global
environment for growth, and high inflation. Inflationary pressures will intensify
in 2024, given drought conditions and increase in domestic taxes.
The fiscal deficit will increase in 2024, driven by high interest payments on external
debt, drought mitigation related spending,wage pressures, and reversal of several
budget revenue measures. Interest payments from servicing RBZ’s external liabilities are projected to significantly increase,posing liquidity risks, amid limited accessto concessional financing. Fiscal deficit isprojected to reach 2.3 percent of GDP in
2024, before slowing to under 2.0 percent
in the medium term.

TABLE 2 Zimbabwe / Macro poverty outlook indicators

The current account surplus is expected
to shrink further, reflecting an increasein imports in the face of drought conditions and lower commodity prices. Exports are therefore expected to decline.
Remittances remain the main driver ofcurrent account surplus.
Poverty is expected to increase in 2024
due to drought and is projected to remain high in the medium term. The
elasticity of poverty reduction to
growth has proven to be very low in
Zimbabwe, undermining the outlook
for poverty reduction amid projected
deceleration of growth in 2024. Thisis further exacerbated by El-Nino induced drought. In the medium term,
vulnerability to poverty is expected toincrease with changes in temperatureand rainfall patterns linked to climatechange. Key structural priorities to reduce poverty and break the dependence on weather cycles include boosting agricultural productivity, facilitating structural transformation throughinvestment climate and monetary andexchange rate reforms, and instituting
a robust social protection system.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
8.5
1.5
142.1
12.8
47.0
61.5

2022
6.5
4.9
31.3
22.3
43.9
54.6

2023e
5.5
3.0
30.6
-18.0
3.0
2.0

2024f
3.3
4.0
3.6
-6.1
1.5
1.1

2025f
3.6
3.6
1.8
5.6
3.4
2.5

2026f
3.5
3.5
2.0
4.6
3.4
2.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

8.4
17.5
6.4
7.7

6.4
6.2
5.5
7.0

5.6
11.1
2.8
6.0

3.3
-5.9
4.0
5.1

3.6
6.0
3.0
3.4

3.5
4.9
3.1
3.4

Inflation (consumer price index)

98.5

193.4

305.0

45.1

15.9

72.3

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

1.0
0.7

1.0
1.0

0.8
0.3

0.1
0.0

-0.2
0.0

0.7
0.0

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.0
15.3
58.4
-1.9

0.1
16.4
99.6
0.2

-1.2
17.2
97.0
-0.3

-2.3
18.4
102.6
-1.4

-1.3
18.6
98.7
-0.4

-1.2
18.4
91.3
-0.5

41.4
65.8
85.6

39.6
64.2
85.0

38.2
63.1
84.5

37.7
62.7
84.3

37.1
62.0
84.0

36.4
61.2
83.7

0.4
9.9

1.2
10.4

0.7
10.8

-0.6
10.1

-0.4
9.7

-0.2
9.5

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2019-PICES. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2019) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

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Macro Poverty Outlook

04 /2024