Sub-Saharan Africa

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

SpringMeetings2022

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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
The Gambia
Ghana
GuineaGuinea-Bissau
Kenya
Lesotho

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Apr 22

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

Senegal
Seychelles
Sierra Leone
SomaliaSouth Africa
South Sudan
Tanzania
Togo
UgandaZambiaZimbabwe

ANGOLAKey conditions andchallenges

Table 1

2021

Population, million

33.9

GDP, current US$ billion

81.8

GDP per capita, current US$

2410.8International poverty rate ($1.9)

a

49.9
a

71.5

a

88.5

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

51.3

School enrollment, primary (% gross)

b

113.5

b

61.1

Total GHG Emissions (mtCO2e)112.5

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2015); Life expectancy(2019).

Angola recorded marginally positive
GDP growth in 2021 following five consecutive years of economic contraction.
With oil prices expected to remain high,the outlook for 2022 is favorable. However, despite improvements in macroeconomic policies in recent years, a legacy ofunderinvestment in physical and humancapital poses considerable challenges topoverty reduction and economic diversification, leaving Angola highly exposed torisks from volatile oil prices, the pandemic, and climate change.

Angola remains excessively dependent on
the oil sector. Although oil production
declined by 39 percent since its peak in2015, oil still accounts for 94 percent ofexports as of 2021. This lack of diversification reflects the legacy of macroeconomic instability, underinvestment in infrastructure and human capital, and achallenging business environment. The
decline in oil prices and production without growth elsewhere in the economy
translated into a cumulative GDP contraction of 9.2 percent from 2015 to 2020, lossof formal jobs, and an increase in poverty, which has been exacerbated in recent
years by high food inflation.
Underinvestment in the social sectors
has resulted in low levels of schoolingand poor health outcomes, such thatAngola is among the countries with thelowest Human Capital Index (0.36 in2020). Angola is also highly exposed toclimate risks, with parts of the country continuously suffering from severe
drought, floods, and soil degradation
since around 2012.
Angola’s
economysuffered
from
COVID-19 indirectly through falling oil
prices, but overall, the country has been
relatively resilient against the pandemic.
As of February 14, 2022, Angola had 55.9
COVID-19 deaths per million people(compared to 745.9 globally) and 10.9 million people (69.3 percent of the target

population) had received at least one
dose of a COVID-19 vaccine.
Main challenges include a steeper and renewed decline in oil production, limited
economic diversification, difficulty in attracting foreign direct investment in nonoil sectors, as well as Angola’s vulnerability to climate change. Moreover, food inflation, already at high levels, will likely
be exacerbated by the increase in global
commodity prices and economic uncertainty triggered by the Russian invasionof Ukraine and associated sanctions andsupply disruptions.

Recent developments
Angola exited the recession in 2021, withgrowth expected at 0.2 percent as agriculture and services growth offset continued
declines in oil production. Oil exports
grew 60 percent while imports grew only
23 percent, widening the current account.
This, together with an SDR allocation of
US$1 billion, increased Angola’s net reserves, maintaining import coverage ataround eleven months. Non-oil exports(wood, fish, granite, and beverages) remained small and volatile.
Largely because of higher oil prices, theexchange rate appreciated 13.4 percent
YoY by December 2021, recovering almost a third of the 2020 depreciation.
The stronger currency has not translated
into lower inflation, which remains highat 27 percent, driven by high food prices
and the lagged effect of monetary measures from 2020. In response, the central

FIGURE 1 Angola / Actual and projected public debt levels
and primary balance

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

Percent of GDP
10

Poverty rate (%)

Percent of GDP
150

Real private consumption per capita (constant LCU)

100

Public debt (RHS)
Primary fiscal balance

30000

90
25000

80
8

70
100

20000

60
50

5

15000

40
10000

30

50

20

3

5000

10
0

0
2008 2010 2012 2014 2016 2018 2020 2022 2024

0

0
2019

2020

2021

2022

2023

2024

Sources: Angola Ministry of Finance, World Bank MTI.

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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2

Apr 22bank raised the reference rate from 15.5
to 20 percent.
Higher oil receipts combined with buoyant non-oil revenues (especially VAT) led
fiscal revenues to grow about 47.5 percent
in 2021. Public spending growth, estimated at 18.6 percent, was driven by current spending as public investment grew
by 0.2 percent. Most additional oil revenue was saved, increasing the primary
surplus. This, together with currency appreciation and GDP growth, drove debt
levels from 130.5 to 88.1 percent of GDP
from 2020 to 2021. Consequently, bondyields declined, and Angola’s credit rating was upgraded.
Employment declined to 61.2 percent of
adults in Q4 2021 (from 62.8 percent a
year earlier), with the vast majority (81percent) employed in the informal sector. Food insecurity and poverty wereexacerbated by limited employment opportunities and food inflation. After two
years of stagnation, the minimum wage
rose 50 percent against accumulated inflation of 52 percent. The Kwenda cashtransfer program has about 500,000 out

of a projected 1.6 million vulnerable
families enrolled, 300,000 of whom havereceived at least one transfer.

OutlookWith soaring oil prices, GDP growth is expected at 2.9 percent in 2022. The non-oil
sector is expected to grow 2.3 percent, propelled by mining of diamonds and otherminerals, the beverage and constructionindustry, agriculture and fisheries, andtrade. With rising oil prices and a small but
temporary recovery of oil production, oil
sector growth is projected at 4.4 percent.
The 2022 budget keeps Angola on a pathof fiscal consolidation. The government is
expected to increase the primary surplus
from 7.3 percent of GDP in 2021 to 8.1
percent of GDP, further decreasing public
debt levels to 74.2 percent of GDP. This,
however, remains subject to oil pricerisks as non-oil revenues are expected
to increase only gradually. Despite continued monetary tightening and currency

TABLE 2 Angola / Macro poverty outlook indicators

appreciation, the government is expected
to miss its inflation target of 18 percent
due to rising global commodity prices
which particularly affect staple foods.
Projections suggest that the share of theAngolan population living on less than
US$1.90 per day (2011 PPP) will remain at
53.2 percent in 2022 as economic growth
fails to keep up with population growth.
This includes over 1.3 million people facing severe hunger due to drought in someof the poorest provinces in the country.
Meanwhile, the continued expansion of
the Kwenda program and improvements
in non-oil sectors are expected to increase
the welfare of the poorest.
The risks to the outlook arise from possible
future waves or variants of COVID-19, oilprice volatility, and political uncertainty
resulting from the 2022 elections. In addition, escalating geopolitical tensions or climate-related natural disasters can further
disrupt global value chains and fuel foodprices growth with potentially severe consequences for the food security and welfare of vulnerable households.

(annual percent change unless indicated otherwise)
2019
-0.7
-6.2
-1.6
-1.9
-5.9
-11.0
-1.2
-1.3
-3.6
2.2
17.1
6.2
-2.1
0.8
119.6
6.5
52.2
73.0
90.4
-5.0
14.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-5.5
-4.0
-7.1
-1.6
-6.3
-21.7
-6.7
2.4
-10.4
-3.5
22.3
2.4
-3.3
-1.9
130.5
4.9
54.1
74.2
91.8
-3.6
13.3

2021e
0.2
6.6
6.5
8.0
-10.8
6.0
0.2
12.2
-9.1
9.6
25.6
9.1
-3.2
2.5
88.1
7.3
53.2
73.6
91.1
-1.5
13.0

2022f
2.9
3.1
2.8
3.0
4.3
6.0
2.9
6.5
0.8
4.4
20.0
11.0
-0.2
2.9
74.2
8.1
53.2
73.7
91.2
-1.2
12.3

2023f
3.1
4.7
2.5
4.5
1.3
8.0
3.1
7.0
-0.2
5.6
12.3
9.2
0.5
2.0
68.3
7.7
52.8
73.4
90.9
-0.4
12.1

2024f
3.3
4.3
4.4
5.5
-0.3
6.5
3.3
6.8
0.2
5.4
9.5
6.1
0.8
1.5
64.6
6.5
52.5
73.2
90.6
-0.1
12.0

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-IDREA. Projection using point to point elasticity at regional level with pass-through = 0.7 based on private consumption per capita in constantLCU.
b/ Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.

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Apr 22

BENINKey conditions andchallenges

Table 1

2021

Population, million

12.5

GDP, current US$ billion

18.5

GDP per capita, current US$

1487.0International poverty rate ($1.9)

a

19.2
a

51.3

a

79.3

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

37.8

School enrollment, primary (% gross)

b

114.2

b

61.8

Total GHG Emissions (mtCO2e)30.5Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Backed by a rebound of services and dynamic construction sector, real GDP
growth is estimated to have reached 6.6
percent in 2021, in-line with pre-COVID
trends. The fiscal deficit deteriorated further as government extended its socioeconomic response into 2021 and maintained capital expenditure levels, puttingpressure on PPG debt. Global inflation,
regional insecurity spreading through thenorthern border, and tightening global financial conditions cloud the outlook.

Prior to the pandemic, Benin experienced
robust real GDP growth, averaging 6.4
percent between 2017-2019, due to a relatively favorable external environment andcommitment to macroeconomic stability.
The swift socio-economic response to
COVID-19, combined with the continuation of large public infrastructure projects
supported growth throughout 2020, keeping the real GDP deceleration among thelowest in SSA. The Government Action
Plan (PAG) which initially covered theperiod 2016-2021 was extended to 2026
following the reelection of President
Talon in April 2021, and PAG2 maintains
its focus on strengthening governanceand on ambitious infrastructure investments (transport, logistics, agriculture,and tourism).
Extending the recovery into the medium
term will require continued structural reforms alleviating key constraints. First,
productivity growth in services and industry has been slow, due to low quality education and skills mismatches. Second, the
COVID-19 crisis highlighted a lack of resilience stemming from high gender disparities and inadequate social safety nets.
Finally, even though fiscal consolidation
efforts since 2016 enabled the use of countercyclical fiscal policy in response to the
COVID-19 crisis, domestic revenue mobilization remains structurally weak, limiting fiscal space for productive spending.

In terms of risks, sustained food and energy price volatility fueled by global geopolitical tensions would negatively impact
poor and vulnerable households, increasing food insecurity and slowing poverty
reduction. Extreme climate events would
also cause damage and jeopardize agricultural output. Increased insecurity in thenorthern part of the country could threaten
the economic development of these rural
regions, push more households intofragility and trigger new security spending, reducing fiscal space. Finally, monetary policy tightening in advanced
economies would put pressure on Benin’s
external financing and debt sustainability.

Recent developments
Real GDP growth is expected to havereached 6.6 percent in 2021, 3.8 percent
in per capita terms, driven by a strong
rebound of the tertiary and construction
sectors. Private consumption (+3.9 percent) and total investment (+19.4 percent)benefited from easing cross border restrictions and large public investment projects. Inflation eased to 1.7 percent on average in 2021, notably on the back oflower energy prices until September 2021
and a good, yet delayed, local subsistence
farming production.
The external current account deficit (CAD)
is estimated to have significantly deteriorated to -4.6 percent of GDP in 2021, after
a temporary improvement to -1.7 percent
of GDP in 2020. In 2021, the resumption ofre-export activities following the end of the

FIGURE 1 Benin / Budget balance and change in public andpublicly guaranteed debt

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

Percent of GDP
10

Poverty rate (%)

Real GDP per capita (constant LCU)

100

900000890800000680700000

4

70

2

60

0

50

-2

40

600000500000400000300000

30

-4
-6
-8
2011

2013

2015

2017

Change in debt (%GDP)

2019

2021

20

20000010

100000

0

2023

0
2011

Budget balance (%GDP)

Source: World Bank.

2013

2015

2017

4

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank Notes: see Table 2.

MPO

2019

border closure with Nigeria and the large
import demand required for infrastructure
projects fueled the deficit. The CAD was
mainly financed by external commercial
borrowing in 2021.
Fiscal policy remained expansionary for asecond consecutive year with the fiscal
deficit (incl. grants) up from 4.7 percent of
the GDP in 2020, to 5.8 percent of GDP
in 2021. The increase was mostly driven
by capital expenditure and the extensionof COVID related current spending. Revenues, excluding grants, increased from
12.7 to 13.4 percent of GDP in 2021, due
to higher customs revenues and resilient
tax revenues. Public and publicly guaranteed (PPG) debt increased to 51.7 percent
in 2021 (+9.2 ppt compared to 2019), with
Eurobond issuances representing the bulkof 2021’s financing.
Benin’s monetary and exchange rate policies are managed by the Central Bank ofWest African States (BCEAO), which maintains a fixed peg between the CFA Francand the Euro. Its reserves reached 5.8
months of imports of goods and services
in 2021, as a result of increased exports,
the August 2021 SDR allocation, and portfolio inflows linked to Eurobond issuancesin the region.
Poverty and vulnerability remain high.
The poverty rate based on the national
poverty line was 38.5 percent in 2019, withstrong spatial disparities: rural poverty

stood at 44.2 percent, +12.8 ppts higher
than in urban areas. Poverty reduction($1.9 a day, 2011 PPP) based on the 2018
EHCVM was estimated at 19.2 percent,and it slightly slowed down in 2021 (-0.5
percent y-o-y) versus 2020, as extreme
poor represented 18.3 percent of the population end-2021.

Outlook
The ongoing war in Ukraine and its
repercussions in fuel and food prices, areexpected to negatively weigh on the shortterm outlook. Real GDP growth is expected to decelerate to 5.9 percent in 2022, before stabilizing at around 6 percent withfiscal consolidation muting the rebound.
A gradual shift from public to private
investments in the medium term is expected to drive growth on the demandside, underpinned by the implementationof the PAG 2.
Inflation is projected to sharply increase to
3.9 percent in 2022, and gradually abate
as the impact of the ongoing conflict in
Ukraine recedes.
The current account deficit (including
grants) is expected to widen to 6 percent of
GDP in 2022, as import prices rise driven
by imports from construction and energy
sectors. The CAD will be mainly financed

TABLE 2 Benin / Macro poverty outlook indicators

by regional bond emissions and concessional financing.
Swift response to alleviate the surge infood and fuel prices on households, willkeep the fiscal deficit (including grants)high at 5.5 percent of GDP in 2022. A revenue-based fiscal consolidation is expected
to narrow the fiscal deficit to 4.4 percent
in 2023 and reach the WAEMU target of 3
percent of GDP by 2025. As a result, PPG
debt is expected to peak at 52.4 percent end
2023 before gradually decreasing.
WAEMU reserves are expected to fall toaround 5.5 months of imports in 2022
and 5.3 months in 2023 and 2024, reflecting faster growth in imports and areduction in net capital inflows (as apercent of GDP), as the environment forEurobond issuances remains uncertain.
Growth-friendly fiscal consolidation andthe implementation of structural reforms
are key to maintaining reserves at an
optimal level.
Poverty reduction is expected to gradually
revert to its pre-crisis downward trend as
the economy rebounds, but recent increases in food and energy prices could slow
its pace. On the back of improved employment indicators, and social protection programs, the $1.9/day PPP poverty headcount rate is expected to decrease to 18
percent in 2022 (-0.3 percent y-o-y), and to
17.4 percent by 2024.

(annual percent change unless indicated otherwise)
2019
6.9
3.5
5.8
8.4
-1.6
-6.1
6.9
7.2
6.2
7.1
-0.9
-4.0
1.3
-0.5
42.5
1.1
18.8
50.8
78.6
1.6
35.2

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
3.8
3.0
19.6
-10.9
-15.4
-21.5
3.8
1.8
5.2
4.5
3.0
-1.7
0.5
-4.7
46.1
-2.7
18.7
50.7
78.4
2.3
36.0

2021e
6.6
3.9
8.5
11.6
23.8
19.8
6.6
3.2
9.4
7.4
1.7
-4.6
1.4
-5.8
51.7
-3.6
18.3
50.2
77.7
4.2
38.0

2022f
5.9
3.5
9.2
11.0
14.0
13.4
5.9
5.0
8.4
4.7
3.9
-6.0
1.5
-5.5
52.2
-3.7
18.0
49.8
77.1
3.6
39.4

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2011-EMICOV, 2015-EMICOV, and 2018-EHCVM.Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
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 22

2023f
6.1
3.6
-2.0
15.4
8.3
6.9
6.1
5.4
9.5
3.9
2.5
-5.3
1.8
-4.3
52.3
-2.6
17.7
49.5
76.5
3.3
40.6

2024f
6.0
4.3
3.0
10.2
5.8
4.6
6.0
5.5
10.1
2.9
2.0
-4.8
2.2
-3.1
51.2
-1.6
17.4
49.1
75.9
3.5
41.8

BOTSWANA
Table 1

Key conditions andchallenges
2021

Population, million

2.4

GDP, current US$ billion

16.5

GDP per capita, current US$

6849.4

International poverty rate ($1.9)

a

14.5
a

36.5

a

59.1

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

53.3

School enrollment, primary (% gross)

b

103.2

b

69.6

Total GHG Emissions (mtCO2e)59.1

Life expectancy at birth, years

rationalizing the SOE sector and addressing constraints that hinder private sector
engagement in trade and investment are
central to the recovery.

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2015); Life expectancy(2019).

Botswana’s economic growth is projected
to moderate to 4.1 percent in 2022 following a 12.1 percent rebound last year. Despite the headwinds created by
COVID-19, economic growth surpassed
expectations. Structural policies to deliver a stronger, resilient, equitable and sustainable recovery remain key to tackle
among others the unemployment rate of
26 percent and the projected poverty rateof 56.6 percent in 2021, based on the upper middle-income country poverty line.

Botswana has historically enjoyedstrong and stable growth since independence supported by the discoveryof large diamond deposits and prudent use of the proceeds. The limitations of the existing diamond sectorled development model have become
increasingly pronounced: growth remains sluggish, job creation is low,
and inequality is high. Weakened global demand has kept diamond proceeds
below pre-global financial crisis levels
and competition from synthetic diamonds and higher production costs
have added further pressures.
Since 2015, continued fiscal expansion to
support growth has created large fiscal
deficits, eroded buffers and weakened theexternal position. Low capital accumulation and sluggish productivity constrained
growth in the non-diamond economy. Unemployment remains high, as the private
sector struggles to create jobs due to highcosts/barriers to doing business and themismatch between poor domestic supplyof skills and high demand.
COVID-19 exacerbated existing economic and social challenges, setting backsome gains made in alleviating poverty,
underscoring the urgent need for a significant shift towards a more diversified
and export-led economy, with the private sector playing a leading role. Improving public sector spending efficiency,

Recent developments
Botswana’s economy rebounded strongly
in 2021 led by the mining sector. GDP
growth is estimated to have bounced
back to 12.1 percent in 2021, following
a contraction of 8.5 percent in 2020, driven by a rebound in diamond activity.
Botswana’s economy grew 13.5 percent
over Q1-Q3 2021 year-on-year (y-o-y).
Supported by the rollout of COVID-19
vaccines, domestic consumption also significantly contributed to the recovery. Diamond prices returned to pre-pandemic levels after a sharp decline in 2020.
Diamond mining increased 35.4 percent
over Q1-Q3 2021, contributing 6.1 percent
to overall GDP growth. Non-mining sectors showed more mixed recovery trajectories. The hospitality sector remained
affected by intermittent restrictions. Unemployment peaked from 24.5 percent in
Q42020 to 26 percent in Q42021. Poverty is projected to have declined to 56.6
percent in 2021 after a projected sharp
increase in 2020, based on the upper
middle-income country poverty line andremains high compared to other upper
middle-income countries.
CPI averaged 6.7 percent in 2021 compared to 1.9 percent in 2020. Inflationarypressures were on an upward trajectory
driven by adjustments to regulated

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

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

Percent, percentage points
0.6

Poverty rate (%)

0.4

60

0.2

50

Real GDP per capita (constant LCU)

70

90000
80000
70000

0.0
-0.2

60000

40

50000

30

40000
30000

20

20000

-0.4
10

-0.6

2019Q1
Q3
2020Q1Gross Capital Formation
Private Consumption
Imports

Q3
2021Q1
Public Consumption
Exports
GDP Growth

10000

0

Q3

0
2009

Source: Statistics Botswana.

2011

2013

2015

2017

6

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

MPO

2019

prices, notably utilities, VAT, Botswana
Housing Corporation rentals, and increases in domestic fuel prices. Bank of
Botswana maintained an accommodative
monetary policy stance, maintaining therepo rate at 3.75 percent. The current
account deficit narrowed in 2021 to an
estimated 2.1 percent of GDP, buoyedby the rebound in diamond exports.
Foreign exchange reserves are estimated to have increased from P58.8 billion (US$4.9 billion) in December 2020
to P61.1 billion (US$5.2 billion) in November 2021 with sound reserves at 10
months of import cover.
With the Government channeling fiscal
resources towards healthcare and supporting the economy, the 2020 projected
deficit increased to 9.4 percent of GDP
hence further Government Investment
Account drawdowns, dropping balancesfrom US$ 1.6 billion in 2020 to an alltime low of US$ 0.8 billion as of September 2021. Debt is projected to reach 25.5
percent of GDP in 2021 from 23.9 percent
in 2020.

Outlook
The outlook is not without substantial
downside risks as the emergence of new
COVID-19 variants pose a threat to the recovery. Prolonged higher inflation leading
to monetary tightening around the world
could slow the recovery exacerbated by the
Ukraine-Russia conflict through high foodand fuel prices. Muted mineral receipts
against envisaged lower SACU receipts
would dampen the fiscal position. Poverty
levels are projected to reach 56.2 percent in
2022 (measured using the upper-middleincome country poverty line, US$5.5/person/day in 2011PPP).
Growth is envisaged to moderate in 2022
but still maintain a robust recovery at 4.1
percent as the base effects from the pandemic shock fade. Progress in vaccination
will support economic activity, especiallyin the non-mining sectors that have continued to be significantly affected by the
pandemic in 2021. Diamond activity is also

TABLE 2 Botswana / Macro poverty outlook indicators

poised to remain robust, supported by external demand. Investment in renewableenergy projects will support growth andcontribute to removing the energy supply
constraint to higher private sector activity.
Abundant copper reserves coupled withrecord-high copper prices will add theneeded impetus. Implementation of structural reforms will support growth over the
medium term as Government pursues fiscal consolidation. Growth is expected toaverage 4 percent over 2023-24.
The current account deficit is expected tonarrow to 0.6 percent of GDP in 2022 andrecord a surplus of 1.6 percent of GDP in
2023 as the rebound in diamond production and favorable terms of trade owing
to subdued diamond supply in Russia anchor the projected drop in SACU revenues.
The fiscal deficit is expected to decline to
4.2 percent of GDP in FY2022/23, driven
by higher revenue collection while expenditure remain under pressure. Public debt
is estimated to reach 27.2 percent of GDP
this year and 26.8 percent by 2023, driven
by external borrowing.

(annual percent change unless indicated otherwise)
2019
3.0
3.5
9.8
10.2
-7.1
11.9
3.2
3.0
-1.5
6.8
2.8
-8.4
1.3
-6.2
21.2
-5.5
12.0
32.5
56.2
0.6
17.2

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)a

Fiscal Balance (% of GDP)
Debt (% of GDP)a,b
Primary Balance (% of GDP)c,dInternational poverty rate ($1.9 in 2011 PPP)c,dLower middle-income poverty rate ($3.2 in 2011 PPP)c,dUpper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-8.5
-2.7
3.6
-7.7
-18.1
5.2
-8.9
-1.7
-20.6
-0.8
1.9
-10.6
-0.6
-9.4
23.9
-8.7
15.0
37.1
59.4
-1.4
15.7

2021e
12.1
6.2
0.7
7.0
44.0
5.1
12.1
3.0
26.7
4.1
6.7
-2.1
0.6
-5.7
25.5
-4.9
12.3
33.1
56.6
3.7
16.8

2022f
4.1
6.0
-5.2
4.1
9.2
5.0
4.1
3.0
4.6
3.8
7.5
-0.6
0.8
-4.2
27.2
-3.4
12.1
32.5
56.2
0.4
17.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Fiscal balances are reported in fiscal years (April 1st -March 31st).
b/ Refers to Public and Publicly Guaranteed debt.
c/ Calculations based on 2015-BMTHS. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
d/ Projection using neutral distribution (2015) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

7

Apr 22

2023f
4.0
4.2
-2.2
4.0
8.3
4.9
4.0
2.8
4.4
3.8
4.5
1.6
1.2
-0.5
26.8
0.3
11.5
31.8
55.8
0.3
17.4

2024f
4.0
4.0
-1.8
4.1
7.3
4.8
4.0
2.6
4.4
3.8
4.5
1.9
1.2
0.0
26.4
1.1
11.2
31.4
55.1
0.4
17.7

BURKINA FASO
Table 1

2021

Population, million

18.0

GDP per capita, current US$

839.4

International poverty rate ($1.9)

a

33.7
a

61.8

a

80.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

Over the past decade, the primary (mainly
agriculture) sector has declined in importance, now contributing less than 20 percent to the economy, with a booming gold
industry generating almost 20 percent of
GDP and 85 percent of exports. Services
account for nearly half of GDP, with the
public and retail sectors creating most jobs
and output. With an increasingly violent
security context outside the capital, about
a quarter of schools have closed in the twomost affected regions, and the number ofinternally displaced persons reached 1.8
million as of March 2022.
Economic prospects are uncertain after
the recent unconstitutional regimechange, combined with growing insecurity, the impact of climatic change, andthe lingering effects of COVID-19. On
January 24, 2022, a military junta seized
power in response to the worsening security situation, which reduced international community financial support andcould prompt economic sanctions by
ECOWAS, the regional bloc from which
the country got suspended. The primarily rain-fed agriculture and livestock sectors remain highly vulnerable to climatic shocks and natural disasters, particularly droughts, floods, and locust invasion. A resurgence of COVID-19, withless than 20 percent of the population
vaccinated, could also subdue domestic
demand and hurt the services sector.

21.5

GDP, current US$ billion

a

47.3

School enrollment, primary (% gross)

b

92.6

b

61.6

Total GHG Emissions (mtCO2e)62.7Life expectancy at birth, years

Recent developments

Key conditions andchallenges

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

The economy grew by an estimated 7.0
percent in 2021 (4.2 percent in per-capita
terms), with investment-led growth inservices, gold mining, and manufacturing. Due to supply bottlenecks in the
agricultural sector, food insecurity remains high, and inflation approached a
10-year peak. The transition government,in place since the January 2022 coupd’état, faces significant challenges in addressing the multifaceted security, humanitarian, and food crises.

Following a sharp recovery in the second
half of 2020, GDP growth remained
strong in 2021, estimated at 7.0 percent.
This reflected a strong rebound in services and robust gold production and was
supported by private investment, mainly into mines, air transport, and beverages. The fiscal deficit remained above 5
percent as the government implemented
the Economic Recovery Plan in response
to COVID-19 while enacting additional
security spending. Despite robust gold
production, the trade deficit deteriorated,with imports rising faster than exports.
With lower donor grants, the current account deficit is estimated to havewidened to 3.0 percent of GDP.
Fueled by an accommodative monetarystance and rising food prices (+14.7 percent) on account of a sharp contraction
in agricultural output, inflation (CPI)
reached 3.9 percent in 2021, a 10-year
high. Food inflation is a particular concern for the poor, as food accounts
for 48 percent of their total consumption. The Central Bank of West African
States (BCEAO) manages the monetaryand exchange rate policies, which maintains a fixed peg between the CFA Francand the Euro. Its reserves reached 5.8
months of imports of goods and services
in 2021 due to increased exports, theAugust 2021 SDR allocation, and portfolio inflows linked to Eurobond issuancesin the region (by Benin, Côte d’Ivoire,
Senegal, and BOAD).

FIGURE 1 Burkina Faso / Real GDP and sectoral
decomposition of real GDP

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

Billion CFAF

Poverty rate (%)

2,250

100

2,000

90

1,750

80

1,500

70

1,250

60

1,000

50

750

40

600,000
500,000
400,000
300,000
200,000

30

500

20

250
-

Real GDP per capita (constant LCU)

100,000

10

Q1

Q3
2016

Q1

Q3
2017

Primary Sector

Q1

Q3
2018

Q1

Q3
2019

Secondary Sector

Q1

Q3
2020

Q1

Q3

0

0
2014

2021

Tertiary Sector

Source: : World Bank staff estimates based on the national statistical institute(INSD) data.
MPO

2016

2018

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

8

2020

The international extreme poverty rate
(US$1.9/day per capita, 2011 PPP) increased by about half a percentage point
to 32.6 percent in 2020, resulting in an additional 290,000 extreme poor. In 2021,
poverty projections based on per-capita
GDP growth estimated a decline to 30.8
percent. Food insecurity (as measured by
the FIES) has followed the same pattern,rising from 44 percent in 2018 to 53 percent
in June 2020 and then falling to 37 percent
by June 2021 (phone surveys). However,the decline in poverty may be overestimated as mining and services growth is unlikely to quickly translate into increased
incomes for poor and rural households,
and the same surveys find that almost halfof households had lower incomes in 2021,
compared to 2020, with only 28 percent reported an increase.

OutlookOver the medium term, the economy is expected to continue slightly below its prepandemic growth path amidst heightened
uncertainty. Real GDP growth is projected

at 4.8 percent in 2022, assuming that there
continue to be no significant sanctions
from the international community in response to the January coup d’état and transition arrangements. Growth is expected tobe driven by private consumption and arebound in agriculture, while the current
account deficit may widen further due tohigh oil prices and a decline in donor
grants after the coup.
The fiscal deficit is projected to worsen in
2022 due to increased security spending
and lower grants before gradually converging toward the WAEMU fiscal targetof 3 percent of GDP by 2025. Over the
medium term, further tax reforms andwage bill controls could significantly lower
the fiscal deficit. Burkina Faso remains at
moderate risk of external and overall public debt distress, with some space to absorb
shocks on external debt.
WAEMU regional foreign exchange reserves are expected to fall to around 5.3
months of imports by 2024, reflecting
faster growth in imports and a reduction in
net capital inflows (as a percent of GDP),as the environment for Eurobond issuances remains uncertain. Growthfriendly fiscal consolidation and structural

TABLE 2 Burkina Faso / Macro poverty outlook indicators

reforms are crucial to maintaining reservesat an optimal level.
The extreme poverty rate is projected tocontinue to fall by about one percentage
point a year over the medium term. The
number of poor is also projected to decrease. Still, with high population growth,
this means only 50,000 to 100,000 would
escape poverty each year, and over 6 million Burkinabe will remain poor for theforeseeable future. Food insecurity is expected to deteriorate due to poor harvests
in 2021 and rising food prices, with the situation particularly severe in the north.
There are significant downside risks to theeconomic outlook with multiple domesticrisks, including further political instability,
climate shocks, local COVID outbreaks,
and widespread social discontent fromhigh food inflation and insecurity. The economic consequences of the Russia-Ukraine
war would primarily be through higher
global food (grains and fertilizer) and energy prices. The projections already reflect
recent sharp price increases of oil, gas,
metals, minerals, and agricultural commodities since January 2022, including
gold, which benefits Burkina Faso.

(annual percent change unless indicated otherwise)
2019
5.7
3.5
13.4
3.0
-0.3
-2.8
5.9
2.1
2.7
9.8
-3.2
-3.3
0.9
-3.3
42.0
-2.1
32.1
60.6
79.2
4.3
10.5

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
1.9
8.6
8.0
-4.0
-3.6
10.0
2.6
6.3
15.6
-6.0
1.9
-0.2
0.6
-5.5
46.3
-4.2
32.6
60.9
79.5
4.7
10.9

2021e
7.0
3.4
6.6
29.1
6.5
15.5
7.0
-4.1
11.0
10.6
3.9
-3.0
0.5
-5.5
55.0
-4.0
30.8
59.7
78.4
4.4
10.7

2022f
4.8
9.9
13.7
-9.2
9.7
10.7
4.8
6.3
4.8
4.1
5.0
-4.8
0.5
-6.6
59.3
-4.4
30.1
59.0
77.9
5.1
11.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

9

Apr 22

2023f
5.4
3.4
12.5
6.2
4.5
5.1
5.4
4.6
5.9
5.5
3.5
-4.7
0.6
-5.1
58.4
-2.9
28.8
57.8
77.4
5.0
11.7

2024f
5.3
5.4
3.2
8.0
3.4
4.8
5.3
6.2
6.9
3.9
3.0
-4.9
0.6
-3.8
56.4
-1.8
27.7
56.7
76.8
4.9
12.1

BURUNDI

Key conditions andchallenges

Table 1

2021

Population, million

12.3

GDP, current US$ billion

3.5

GDP per capita, current US$

287.3

International poverty rate ($1.9)
Gini index

a

72.8

a

38.6

School enrollment, primary (% gross)

b

119.0

b

61.6

Total GHG Emissions (mtCO2e)9.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2013), 2011 PPPs.
b/ Most recent WDI value (2019).

Economic growth is estimated at 1.8 percent in 2021 from 0.3 percent in 2020,
driven by agriculture and a recovery inservices. Industrial growth was subdued
due to mining disputes. While recovery is
expected to accelerate over the medium
term, the country faces serious downside
risks, including from fiscal slippages andinadequate external financing. Poverty
continued to rise, reflecting the negative
per capita GDP growth as population
growth remains high.

Burundi’s development has been hampered by structural weaknesses locking the
economy in a low-level equilibrium sustained by mutually reinforcing fragility
and poverty. Burundi faces a multidimensional fragility trap with recurring politicalinstability, low economic diversification,high population growth, and environmental degradation, leading to low and volatile
growth. The business environment is notconducive to private sector development.
The cessation of most aid since 2015 constrained the government's ability to build
infrastructure. These weaknesses havebeen exacerbated by inconsistent macroeconomic policies including foreign exchange restrictions, exchange rate overvaluation, fiscal dominance of monetary policy, and high public sector indebtedness.
These factors lead to low capital accumulation, weak productivity growth and limited structural transformation of the economy and contribute to higher poverty rates
and curtailed human capital development.
The COVID-19 outbreak has increased theeconomy’s vulnerability with a deterioration of macroeconomic accounts. A recent
survey revealed that off-farm incomes decreased and food insecurity rose whilelarge proportions of businesses reported
declining sales, difficulty accessing inputs
and cash flow crunches. The national development plan 2018-2027 and the President’s program for peace consolidation,

FIGURE 1 Burundi / Public debt, fiscal and current accountdeficits
Percent of GDP
80

14

60

12

50

10

40

8

30

Recent developments
Growth in 2021 reached 1.8 percent from
0.3 percent in 2020, with a rebound in services and steady agriculture growth. Industrial growth was subdued due to theongoing suspension of mining activities ascontracts were renegotiated. Private consumption and investment supported
growth on the demand side. Inflation accelerated to 8.3 percent in December 2021
from 7.5 percent a year before, driven by
food prices.
The fiscal deficit remained high at 5.1 percent of GDP in 2021 from 6.5 percent of

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

Percent of GDP
16

70

social stability and economic growth aims
to sustain growth and resilience by boosting promising sectors, developing humancapital, enhancing environmental protection, and strengthening institutional capacity. Implementing this agenda posessignificant financing needs and requires
deeper economic reforms.
The rising oil and wheat prices resulting
from the Russian invasion and associatedsanctions, represent a negative term - oftrade shock likely to slow economic
growth, accelerate inflation, and increasefiscal and current account deficits. Although projected to accelerate in the medium term, economic growth in 2022 and2023 will be lower than initially projected,
which further complicates efforts to reverse poverty trends. The fiscal and current account deficit are projected to remainhigh in 2022 before improving gradually
over the medium term.

Real GDP per capita (constant LCU)

100

19000018000095

1700009016000085150000680140000

20

4

75

10

2

70

0

0

130000120000110000652015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Public domestic debt (lhs)
Public external debt (lhs)
Fiscal deficit (rhs)
Current account deficit (rhs)1000002006 2008 2010 2012 2014 2016 2018 2020 2022 2024
International poverty rate

Sources: Official statistics and World Bank calculations.

Source: World Bank. Notes: see table 2.

MPO

10

Apr 22

Real GDP pc

GDP in 2020. The increase in revenue mobilization was not enough to cover expenditures, with increased interest payments.
The fiscal deficit continues to be financed
mainly by domestic borrowing, bringing
public debt to 70.6 percent of GDP (73 percent of which is domestic debt).
Driven by oil prices, the current accountdeficit (CAD) remained high at 13.9 percent of GDP in 2021, primarily financed bytrade credits. Despite higher prices for Burundi's main exports, export earnings declined due to the absence of gold exports
following the suspension of mining. The
increase in export volumes focused on a
few regionally traded products (e.g., beer).
Imports of both capital and consumption
goods increased. The SDR issuancestrengthened international reserves, covering 4.3 months of imports at end-October
2021 from 0.8 months a year before. The
exchange rate remained overvalued withthe parallel market premium averaging 70
percent (end-December 2021).
Burundi’s Human Capital Index remains
low at 0.39, with stunting and learning
poverty at 52.2 and 93 percent, respectively. Literacy remains particularly low
among women and rural residents. Withhigh population growth, any demographic dividend remains out of reach. GDP

growth per capita remains negative, withpoverty estimated at 87.2 percent in 2021
(based on international poverty line of$1.90/day, in 2011 PPP), from 72.8 percent in 2013 (the last year with data
availability).

Outlook
Growth is projected to range between 2.5- 4.1 percent in 2022-24. Services should
continue to recover while agriculture willkeep its growth pace assuming favorable
rainfall. Industrial growth is projected toaccelerate due to a loosening of forex constraints from the SDR allocation, and assuming resolution in mining disputes andincreased power generation. Private consumption and public investment are projected to remain high given economic recovery and public infrastructure programs. The fiscal deficit is projected to 5
percent of GDP in 2022 before narrowing
in 2023-24 as current spending is contained
and revenue collection increases. However, the deficit will remain high at 4 percent
of GDP as external grants increase only
gradually. Public debt is expected to decrease to 64 percent of GDP by 2024. The

TABLE 2 Burundi / Macro poverty outlook indicators(annual percent change unless indicated otherwise)
2019
1.8
3.1
8.3
32.9
-0.5
17.1
1.8
3.1
2.1
0.9
-0.8
-13.4
0.0
-4.9
58.5
-4.3
84.0
3.1
14.4

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)
International poverty rate ($1.9 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

CAD is expected to average 14 percent of
GDP in 2024, since export growth (expected from minerals and traditional exports)
will be offset by higher imports driven byhigher consumption growth and exchange
rate overvaluation. The share of the population living below 1.90/day (2011 PPP), is
projected to reach 86.4 percent in 2024.
The outlook is vulnerable to climatic hazards, fiscal risks, and further spillover effects of the Ukraine/Russia conflict. Domestic fiscal risks include weaker growth
performance and higher domestic debt
service costs. External fiscal risks include
weaker grants and higher interest rates
on external borrowing. Inadequate financing of the CAD could heighten pressure
on currency. With weak vaccination, the
COVID-19 pandemic could return and affect the economy. On the upside, foreign
aid could accelerate with the progress ininternational cooperation, following thelifting of sanctions by the USA in November 2021 and the EU in February 2022,
and the re-engagement of the IMF. However, for growth to accelerate meaningfully, Burundi needs to implement reforms
that support export growth and private
sector development.

a,b

2020
0.3
0.3
19.2
-16.6
-14.9
3.4
0.3
2.8
1.8
-1.7
7.5
-10.9
-0.1
-6.5
63.6
-5.2
86.2
3.0
14.2

2021e
1.8
2.8
5.4
17.8
18.2
13.5
1.8
2.9
1.4
1.3
8.3
-13.9
0.0
-5.1
70.6
-2.3
87.2
3.2
13.7

2022f
2.5
3.0
4.0
7.7
10.9
7.3
2.5
3.0
2.4
2.2
9.0
-15.7
0.0
-5.0
68.8
-2.4
87.7
3.3
13.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2006-QUIBB and 2013-ECVMB. Actual data: 2013. Nowcast: 2014-2021. Forecasts are from 2022 to 2024.
b/ Projection using point-to-point elasticity (2006-2013) with pass-through = 1 based on GDP per capita in constant LCU.

MPO

11

Apr 22

2023f
3.3
3.4
3.9
10.3
9.4
7.0
3.3
3.4
3.1
3.3
6.7
-15.0
0.0
-4.0
66.9
-1.8
87.4
3.4
12.9

2024f
4.1
3.6
3.9
13.5
9.8
7.1
4.1
4.0
4.4
4.0
6.7
-14.2
0.0
-3.9
63.8
-1.8
86.4
3.5
12.5

CABO VERDE
Table 1

Key conditions andchallenges
2021

Population, million

0.6GDP, current US$ billion

1.9

GDP per capita, current US$

3363.6

International poverty rate ($1.9)

a

3.4
a

15.4

a

41.3

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

42.4

School enrollment, primary (% gross)

b

100.9

b

73.0

Total GHG Emissions (mtCO2e)0.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ Most recent WDI value (2019).

Growth rebounded to 7.1 percent in
2021, led by the gradual recovery intourism, supporting poverty alleviation.
Inflationary pressures increased, driven
by energy and food. Growth-friendly fiscal consolidation should see growth converging to 6 percent and put debt-toGDP on a declining path over the medium term. The outlook is subject to substantial downside risks stemming fromnew COVID-19 variants, the Ukraine
crisis, and climatic shocks.

Political stability, democratic institutions,and pro-market reforms have generated
significant economic and social progresssince independence in 1975. However,Cabo Verde’s development model, based
on tourism and foreign direct investment(FDI) has shown signs of fatigue since the2008 Global Financial Crisis. The subsequent sluggish recovery in Europe reduced the influx of funds, with dwindlingprivate investment and growth. Ineffective
expansionary fiscal policy between
2010-2015 led to growing fiscal financing
needs and to put public debt back on asustainable path, the authorities initiated aconsolidation program in 2016, including
the reform of loss-making state owned enterprises (SOEs).
The COVID-19 crisis reversed the progressin fiscal consolidation and exacerbated thegrowth model’s vulnerabilities. In addition to the adverse economic effects of mitigation measures, global travel restrictions
led to a sharp contraction in tourism andrelated activities. The authorities responded by expanding public health services
and social protection programs, as well as
by providing financial support to small
businesses. However, poverty reduction
gains made since 2015 were reversed in2020 driven largely by substantial temporary job losses, particularly in the tourism
sector. The unemployment rate increased
from 11.3 to 14.5 percent in 2020.

The pace of economic recovery is subject
to substantial downside risks associatedwith rising uncertainty in Europe dueto the Ukraine conflict, the emergenceof new COVID-19 variants, and climatic
shocks. Fiscal risks are high as the government is exposed to contingent liabilities in sectors that are particularly vulnerable to the crisis, such as aviation,
ports, and utilities. A sustained Ukraine
war could reduce investments andtourism flows and trigger fiscal liabilities.
Moreover, Cabo Verde remains highly exposed to natural disasters such as volcanic eruptions, droughts, floods, and rising sea levels that could further weigh on
external and fiscal balances.

Recent developments
Economic activity is estimated to have expanded by 7.1 percent in 2021, magnified
by base effects after a contraction of 14.8
percent in 2020. Growth was led by a slightrecovery of tourism from the second quarter. Retail and wholesale trade, construction, and public administration were themain contributors of growth. On the demand side, public consumption and net
exports were the main drivers.
The current account deficit (CAD) is estimated to have declined from 15.9 percent of
GDP in 2020, to 14.2 percent in 2021, supported by an increase in remittances and themoderate recovery in services exports. The
CAD was financed by concessional loans
and FDI. International reserves reached 6.9
months of prospective imports.

FIGURE 1 Cabo Verde / GDP per capita and debt outlook

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

Percentage of GDP
240%

Poverty rate (%)

Billions, CVE
240

Real GDP per capita (constant LCU)

60

35000050300000

215
215%

200
182

190%

160

165%

154.9

157.1

153.1

140%
124.7

124.1

115%

116

200000

120
147.1

140.8

2500004030150000

80

20
110

104

100000

40

100

98

90%

10

50000

0
2018

2019

2020

2021e

2022f

2023f

2024f

0

0
2007 2009 2011 2013 2015 2017 2019 2021 2023

Public Debt: Post-COVID-19 forecast (lhs)
Public Debt: Pre-COVID-19 forecast (lhs)Real GDP per capita: Post-COVID-19 forecast
Sources: World Bank and IMF staff estimates. Note: Pre COVID-19 GDP forecast
refers to the 2019 Annual Meetings Macro-poverty Outlook.
MPO

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

12

Apr 22

The fiscal deficit is estimated to have narrowed slightly to 9.5 percent of GDP in
2021, driven by sustained high current expenditure (33.8 percent of GDP). Financing
needs of 8.8 percent of GDP were coveredby concessional credits, grants, domestic
borrowing, and resources freed up by the
Debt Service Suspension Initiative. Public
debt as a share of GDP increased slightly to
157.1 percent of GDP, driven by increased
domestic debt, and remains sustainable,
but the risk of external and total debt distress is high.
Cabo Verde’s monetary policy is alignedwith the Eurozone, as the escudo is pegged
to the euro. Inflationary pressures increased in 2021 due to higher international
oil and food prices. Average headline inflation rose from 0.6 percent in 2020, to
1.9 percent in 2021. Food inflation, whichstood at 0.6 percent, affected disproportionally the poor as the bottom forty percent of the population spends about 34
percent of their income on consumption.
The rebound in economic activity in 2021
resulted in a reduction in the poverty
rate from 14.7 percent to 12.3 percent (using $3.2 US per day PPP in 2011), reflecting nearly 12,000 fewer people living

in poverty. The extreme poverty rate fellslightly from 2.4 percent to 2 percent.

OutlookReal GDP growth is projected to reach
5.5 percent in 2022 (4.4 percent in percapita terms), driven by the continued recovery of the tourism sector. The Ukraine
crisis will weigh on growth, mainly
through increasing oil and food prices.
Over the medium term, private consumption and investment in tourism andthe blue economy will be the main contributors to growth. The outlook is subject to substantial downside risks stemmingfromclimateshocks,new
COVID-19 variants, the realization ofcontingent liabilities, increased global uncertainty due to the Ukraine war, and delays in SOE reforms.
Inflationary pressures are expected to peakin 2022, reaching 3.5 percent, reflecting thestress on global value chains and the impact of the Ukraine war. Inflation is expected to start stabilizing in 2023 as supply disruptions abate and energy prices stabilize.

TABLE 2 Cabo Verde / Macro poverty outlook indicators

Inflation is projected to converge to 2 percent over the medium-term.
The CAD is projected to reach 11.8 percent
of GDP in 2022, falling to 6.7 percent by
2024 driven by the rebound in service exports. Medium-term external financing
needs are expected to be covered mainly
by FDI, which is expected to reach 5.3 percent of GDP in 2024. International reserves
are expected to remain strong, at 6 to 7
months of imports.
The authorities are committed to gradualfiscal consolidation over the medium term,
which includes enhanced management offiscal risks, notably from SOEs, and revenue mobilization. The primary fiscal
deficit is projected to decline to 8 percent of
GDP in 2022. Fiscal consolidation and prudent borrowing policies should reduce thepublic debt-to-GDP ratio to 140.8 percent
by 2024.
The poverty rate (based on the lowermiddle income poverty line of US$3.2 aday, 2011 PPP) is projected to decline to10.6 percent in 2022 and 8 percent by
2024. Poverty reduction will be supported
by growth, mainly in the tourism sector,
and the stabilization of inflation over the
medium term.

(annual percent change unless indicated otherwise)
2019
5.7
5.9
4.8
-6.3
8.7
0.8
5.7
-6.8
7.5
6.3
1.1
-0.4
4.2
-2.4
124.1
0.2
2.0
10.2
32.5
2.5
87.5

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-14.8
-11.3
0.8
19.7
-58.4
-22.5
-14.8
-6.3
-2.0
-19.2
0.6
-16.5
3.7
-10.0
154.9
-7.1
3.1
14.7
41.1
2.2
88.1

2021e
7.1
3.9
7.5
11.2
8.4
7.4
7.1
8.1
10.3
5.9
1.9
-13.5
5.8
-9.5
157.1
-7.0
2.4
12.3
37.0
2.1
88.7

2022f
5.5
2.3
2.3
12.5
22.4
13.6
5.5
4.5
6.4
5.3
3.5
-11.8
2.6
-8.0
153.1
-4.8
2.0
10.8
34.2
2.5
88.9

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2007-QUIBB, 2019-, and 2015-IDRF. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
b/ Projection using point-to-point elasticity (2007-2019) with pass-through = 1 based on GDP per capita in constant LCU.

MPO

13

Apr 22

2023f
6.1
3.4
2.5
10.4
13.4
9.1
6.1
2.9
6.3
6.3
2.3
-7.0
4.2
-7.1
147.1
-3.6
1.6
9.2
31.2
2.4
89.1

2024f
6.0
3.0
1.7
10.6
12.7
8.8
6.0
2.6
5.6
6.5
2.0
-6.7
5.3
-5.9
140.8
-2.2
1.4
8.0
28.7
1.5
90.1

CAMEROON
Table 1

Key conditions andchallenges
2021

Population, million

27.2

GDP, current US$ billion

42.0

GDP per capita, current US$

1543.7

International poverty rate ($1.9)

a

26.0
a

47.0

a

71.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

46.6

School enrollment, primary (% gross)

b

105.7

b

59.3

Total GHG Emissions (mtCO2e)

126.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2011 PPPs.
b/ Most recent WDI value (2019).

The completion of infrastructure projects
is expected to boost GDP growth in 2022.
Driven by higher oil prices, the fiscal
deficit is projected to narrow in the medium term, while the current accountdeficit would decline gradually. The impact of the shipping crisis, along with the
Ukraine-Russia war, could put furtherpressure on inflation and incomes. The
outlook remains favorable, but is subject
to several risks, hence the need to accelerate structural reforms.

Cameroon is the largest economy in the
Economic and Monetary Community ofCentral Africa (CEMAC), accounting forover 40 percent of the region’s GDP
and over 60 percent of regional foreignexchange reserves. The oil sector accounts for 4 percent of the country’s
GDP and 13.8 percent of its fiscal revenues in 2021, highlighting Cameroon’s
exposure to commodities and oil priceshocks. The current development model
has run out of steam, as governance indicators have deteriorated, human capital remains weak, and the business environment is unfavorable. High market
concentration and state ownership ofcommercial enterprises also limit domestic competition. The country has become more fragile. Conflicts affecting 6
out of 10 of Cameroon’s regions havedisplaced people, increased violence,and led to a collapse in social services.
The current growth level is too low toachieve a substantial poverty reduction.
Although the poverty rate has declined
over the last decade, the absolute number of poor people has increased consistently due to population growth. The
COVID-19 crisis has reversed progressin poverty reduction, with the poverty
rate estimated to have increased in 2020.
The debt stock has been rising since2016, calling for improved debt management to attract new investment.

For growth to accelerate and become
more inclusive, the government’s roleneeds to shift from being the main driverof economic activity to: (i) providing astable and fair regulatory environment
and adequate infrastructure services; and(iii) effectively delivering basic services tothe population.

Recent developments
Cameroon’s economic activity gradually
recovered in 2021 on the back of dynamic
secondary and tertiary sectors andstronger external demand. Real GDP
growth reached 3.5 percent in 2021, or 0.8
percent in per capita terms. Higher oil production and prices and a rebound in services and external demand have supported
private consumption and investment. Increased shipping costs have put pressure
on prices in recent months, limiting theavailability of food staples in local markets. Meanwhile, higher exports and oil
prices have improved Cameroon’s current
account balance. Following a sharp decline
in 2020, imports moderately increased in
2021, driven by large infrastructure projects, including initiatives related to theAfrica Cup of Nations. Despite the improving economic context, vaccination
against COVID-19 remains low at 2.9 percent of the total population, as of endMarch 2022.
The fiscal deficit remained unchanged to
3.2 percent of GDP in 2021, owing to
improved revenue collection and expenditure controls. Oil revenues reached 1.9

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

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

Percent, percentage points
10

Poverty rate (%)
90

800000880700000670600000

4

60

2

50

0

40

-2

30

-4

20

20000010

100000

-6
2000

2003

2006

Gov. cons.
Inventories
Statistical disc.

2009

2012

2015

Exports
Private cons.
GDP

2018

2021

2024

Real GDP per capita (constant LCU)

500000400000300000

0

GFCF
Imports0
2007 2009 2011 2013 2015 2017 2019 2021 2023

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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14

Apr 22

percent of GDP in the same year due
to higher oil prices. Tax revenues also
increased in 2021 due to better-than-expected collection of the value-added tax(VAT), corporate income tax, and excises.
Similarly, efforts to improve the tax administration, including digitization andtax audits, also contributed to the revenue
increase. On the expenditures side, eventhough higher oil prices led to higher fuelsubsidies, the authorities cut current expenditures on goods and services, allowing for some expansion of capital outlays. Capital spending increased from 4.6
percent of GDP in 2020 to 5.4 percent
of GDP in 2021, while the public debt
stock increased from 44.9 percent of GDP
in end-2020 to 47.2 percent of GDP by
end-2021.
The Bank of Central African States tightened its monetary policy in late 2021 overconcerns about the evolution of foreign exchange reserves. Despite higher oil prices
and the International Monetary Fund Special Drawing Rights allocation (equivalent
to US$1.4 billion), the country’s foreign exchange reserves represented just above 3
months’ worth of imports of goods andservices by end 2021 (same as by end 2020).

Outlook
The economic recovery is expected to consolidate, with growth projected to reach
4.0 percent in 2022 and 4.4 percent in 2023.
Economic growth would benefit from sustained higher oil prices as the pandemic
comes progressively to an end. Unless thegovernment introduces price subsidies, theUkraine-Russia war will affect the outlook,have an impact on poverty reduction, andweigh on inflation. Key transmission channels are: (i) increased wheat prices, translating into higher prices for bread; (ii)higher oil and energy prices, leading tohigher production costs; and (iii) higher
fertilizer prices, affecting the majority ofpeople working in agriculture. Efforts to
reduce poverty will also be hampered by
the ongoing security crisis in parts of thecountry. Nevertheless, the poverty rate is
expected to remain constant at 23 percent
in 2022.
The current account balance should continue to improve, owing to robust oil andnon-oil commodity exports. The country’s
fiscal deficit is projected to narrow fromTABLE 2 Cameroon / Macro poverty outlook indicators

3.2 percent of GDP in 2021 to 2.8 percent
in 2024. Non-oil revenues are expected toincrease, due to simplified administrative
measures on property income and the new
tax on mobile money transfers. Spending
reprioritization, including the gradual reduction of subsidies to SOEs, would contain expenditure in the medium term. Still,
Cameroon remains at high risk of externaland overall debt distress, although debt isassessed as sustainable, according to thelatest Debt Sustainability Analysis conducted in February 2022.
The outlook remains subject to risks associated with: (i) a further tightening of monetary policy; (ii) a protracted Ukraine-Russia war; and (iii) a persistent security crisis in the North-West, South-West, and Far
North regions. Should such risks materialize, real GDP would grow more modestly
than under the baseline scenario, affecting
fiscal and external accounts. A sharp risein global risk premia following a monetary
policy tightening in advanced economies
would affect the outlook and debt sustainability. The increase in international oil
and food prices would add on existing inflationary and fiscal pressures.

(annual percent change unless indicated otherwise)
2019
3.7
4.5
1.8
8.1
5.1
10.5
3.6
2.8
3.6
3.9
2.5
-4.4
-3.3
43.0
-2.4
23.2
42.4
66.4
0.9
9.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
0.5
3.3
2.3
2.4
-21.0
-5.4
0.5
0.1
1.3
0.3
2.5
-3.7
-3.2
45.8
-2.3
23.9
43.4
67.5
0.4
9.5

2021e
3.5
3.8
3.4
8.2
3.2
9.0
3.5
4.1
4.1
3.1
2.5
-4.0
-3.2
47.1
-2.1
23.6
42.9
67.0
0.9
9.8

2022f
4.0
4.0
9.1
8.9
3.9
11.5
4.0
4.3
4.4
3.7
3.0
-3.9
-3.0
45.1
-1.9
23.1
42.2
66.2
1.0
10.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2007-ECAM-III, 2019-, and 2014-ECAM-IV. Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024.
b/ Projection using point-to-point elasticity (2007-2019) with pass-through = 1 based on GDP per capita in constant LCU.

MPO

15

Apr 22

2023f
4.3
5.4
-5.2
8.5
11.5
11.0
4.3
5.6
4.5
3.8
2.5
-3.8
-2.9
42.3
-2.0
22.6
41.3
65.3
1.0
10.3

2024f
4.4
4.6
-7.9
8.9
8.8
7.0
4.4
5.6
4.5
4.0
2.0
-3.7
-2.8
39.8
-1.9
22.0
40.3
64.2
1.1
10.5

CENTRALAFRICAN REP.
Table 1

2021

Population, million

4.9GDP, current US$ billion

2.4

GDP per capita, current US$
Gini index

Key conditions andchallenges

484.6

a

56.2

School enrollment, primary (% gross)

b

102.0

b

53.3

Total GHG Emissions (mtCO2e)88.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2008), 2011 PPPs.
b/ WDI for School enrollment (2016); Life expectancy(2019).

Renewed insecurity prevented the Central
African Republic’s (CAR) economy fromrebounding in 2021. The outlook is subject to downside risks arising from a reversal in security gains and the impact of
the Ukraine-Russia war on commodityand food prices, which could adversely affect public finances and growth and resultin significant social hardship and humanitarian costs. The ability of traditional
partners to provide support in a geopolitically more complex environment weighsheavily on the outlook, which is vulnerable to headwinds.

Repeated instability and violence haveexacerbated CAR’s socioeconomic indicators and kept the country at the bottom
of most development rankings. While endowed with ample natural resources, thecountry’s economy is poorly diversified,with agriculture and forestry constituting
the backbone of economic activities. The
agriculture sector accounts for more than75 percent of total employment, and timber, cotton, coffee, diamond, and gold
represented more than 85 percent of totalexports in 2019. Poverty is high, withmore than 7 in 10 Central Africans living
below the international poverty line
(measured using US$1.90 per day, 2011
PPP). Inadequate social protection systems and limited access to education andhealthcare facilities are major bottlenecks
for human capital accumulation. The formal private sector is small and constrained by several structural challenges,
including limited access to finance, a
weak regulatory framework, poor infrastructure (e.g., energy and transportation), lack of skilled labor, and a fragile
security and political environment. The
humanitarian situation remains precarious, with 43 percent of the population
facing acute food insecurity. As of January 2022, there were 734,000 refugees outside the country—the highest level since
December 2013—and 652,000 internallydisplaced persons.

Recent developments
CAR’s economic growth stagnated in 2021
due to renewed insecurity, coupled withthe protracted effects of COVID-19 on the
global economy. Economic activity suffered particularly in 2021Q1 as renewed
insecurity amid election disputes disrupted production and trade. Boosted by the
resumption of commerce along the
Douala-Bangui corridor and security
gains, economic activity picked up in thesecond half of the year. Mining and agricultural production accelerated, owing to
improved security around production sites
and favorable rainfall. Public investment
declined from 11.4 percent of GDP in 2020
to 7.5 percent of GDP in 2021 as the government unwound its COVID-19 fiscal
stimulus package. Economic growth isprojected to increase by 3.2 percent in 2022,
supported by the prospect of improved security and the ceasefire agreed in the Luanda roadmap (i.e., the regional initiative
to restore peace). Conflict and COVID-19
have hampered progress in reducing extreme poverty, with 71.4 percent of the
population living in extreme poverty in
2021, up slightly from 71.0 percent in 2020.
Renewed conflict in late 2020/early 2021
contributed to significant inflationarypressures in the first half of 2021, which
decelerated markedly as traffic along thecountry’s lifeline resumed. As a result,inflation reached an average of 3.8 percent in 2021—above the 3 percent regional ceiling. High inflation is projected
to linger in 2022 on the back of rising

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
8

Poverty rate (%)
78
76

6

74

200000

72

4

70

2

15000068
66

0100000

64

-2

62
50000

60

-4
-6

Real GDP per capita (constant LCU)
25000058
2016 2017 2018 2019 2020
Exports
Government Consumption
Real GDP growth562021 2022 2023 2024
Gross Fixed Investment
Private Consumption

02008 2010 2012 2014 2016 2018 2020 2022 2024
International poverty rate

Source: World Bank.

Source: World Bank. Notes: see Table 2.

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16

Apr 22

Real GDP pc

commodity prices and persistent disruptions in food supply chains. The Bank ofCentral African States tightened its monetary policy in late 2021 over concerns
about the evolution of foreign exchange
reserves, which, despite higher oil prices
and the International Monetary Fund
2021 Special Drawing Rights (SDR) allocation, represented just above 3 months’
worth of regional imports of goods andservices by end-December 2021—roughly
the same as at end-December 2020.
The overall fiscal deficit widened from 3.3
percent of GDP in 2020 to 6.1 percent of
GDP in 2021, reflecting a decline in domestic revenue and the cancelation andpostponement of budget support fromdonors due to geopolitical tensions andthe lack of transparency of the country's
security expenditures. Pressures on publicfinances were high throughout 2021 despite cuts in public spending, forcing thegovernment to rely on bridge financing
on the domestic market. Cashflow pressures are expected to remain high in 2022,with a risk of a potential liquidity shortage if budget support from donors does
not materialize. The government has already revised downward its public expenditure plan and is considering new
borrowing on the domestic market to prevent any liquidity shortages.
The current account deficit widened from
8.8 percent of GDP in 2020 to an estimated

10.8 percent of GDP in 2021, owing mainly
to delays in the disbursement of officialtransfers. The SDR allocation (equivalent
to 5.8 percent of GDP) did, however, provide additional liquidity to meet some of
the country’s financing needs. The tradebalance improved as the rebound in exports during the second half of 2021 exceeded the uptick in imports. Persistentglobal uncertainty related to COVID-19
and renewed conflicts translated to a lower-than-expected recovery of foreign direct
investment. The current account balance is
projected to improve in 2022 as exports recover and official transfers resume.

Outlook
Provided that security gains are not reversed, and the impact of the UkraineRussia war on the global economic recovery is contained, economic growth isexpected to average 3.5 percent in themedium term, supported by solid agricultural and industrial output on the
supply side and high private consumption on the demand side. Under these assumptions, per capita income is expected to return to its pre-COVID-19 level by
2023. Extreme poverty is projected to remain high, with a slow decline between
2022 and 2024.

TABLE 2 Central African Republic / Macro poverty outlook indicators

International poverty rate ($1.9 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)(annual percent change unless indicated otherwise)

2019
3.1
5.7
7.7
-9.6
1.9
4.9
2.6
3.1
2.1
2.3
2.8
-4.8
1.7
47.9
2.0
70.8
0.9
39.8

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,b

Inflation is expected to remain below theregional convergence criteria in the medium term, contingent on stable and improved security on the Douala-Bangui
corridor and a slowdown in inflationarypressures at the global level. The fiscal
balance is projected to remain in deficit
in the medium term, as donor financing
gradually declines without being offset
by domestic revenues. Public debt is projected to remain sustainable. The current
account balance is expected to improve inthe medium term, reflecting an improvement in the trade balance, but it should
remain structurally in deficit.
Risks to the outlook remain high and tilted
to the downside. The absence of donor
budget support could lead to the accumulation of external arrears and possible nonpayment of public wages, resulting in significant socioeconomic hardship. A reversal in security gains could undermine economic activity and traffic on the main tradecorridor. The possible lingering effect ofthe pandemic, coupled with the impact of
the Ukraine-Russia war at the global level,
could lead to persistent disruptions in
global supply chains and higher commodity prices, resulting in higher fuel and grain
prices, with adverse effects on public finances and private consumption, as wellas on poverty due to the effects of higher
food prices.

2020
0.9
-4.2
21.5
28.3
-2.8
1.0
0.9
4.5
0.0
-1.2
2.3
-8.8
-3.3
44.0
-3.0
71.0
0.6
39.8

2021e
0.9
0.5
-4.9
-9.6
-5.5
-10.3
1.2
3.2
-0.2
0.4
3.8
-10.8
-6.1
48.4
-5.8
71.4
0.6
39.7

2022f
3.2
4.7
-10.3
6.7
6.3
7.1
3.1
3.8
0.6
3.5
3.6
-6.8
-2.3
44.9
-1.8
70.9
1.9
40.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2008-ECASEB. Actual data: 2008. Nowcast: 2009-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2008) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

17

Apr 22

2023f
3.4
5.3
2.9
-1.4
8.2
8.4
3.4
4.2
1.0
3.6
2.7
-7.9
-2.0
43.4
-1.4
70.6
2.2
40.8

2024f
4.0
2.3
1.0
12.3
9.3
4.9
3.9
4.0
1.3
4.6
2.5
-6.6
-1.8
41.9
-1.3
70.3
2.4
41.3

CHAD

Key conditions andchallenges

Table 1

2021

Population, million

16.9

GDP, current US$ billion

11.4

GDP per capita, current US$

672.8

International poverty rate ($1.9)

a

33.2
a

66.4

a

87.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

37.5

School enrollment, primary (% gross)

b

89.2

b

54.2

Total GHG Emissions (mtCO2e)

118.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ Most recent WDI value (2019).

GDP contracted by 1.2 percent in 2021
(4.2 percent per capita) - the second consecutive year of recession – due to a temporary suspension of oil production, socio-political insecurity, and liquidity constraints. This situation likely increased
extreme poverty by 2 percentage points.
Growing food and general insecurity, climatic shocks, and continued dependency
on volatile oil revenues heightens therisks to the fragile recovery during a sensitive political transition.

Chad's economy has performed below potential since the 2014-15 oil price shock.
Notwithstanding the 2018-19 recovery, annual GDP growth contracted by 1.1 percent on average over the past six years,
which, given the rapidly growing population, translated into an annual decrease in
per capita income of 4.1 percent. Oil constitutes about 20 percent of GDP, 35 percent of revenue, and 75 percent of exports.
Chad ranked 187th out of 189 countries on
the Human Development Index in 2020.
Living conditions and access to essential
services remain poor due to severe weather conditions, cyclical insecurity, politicalunrest, weak governance, including oilrevenues management, poor trade networks, low human capital investment, anda lack of infrastructure.
Chad has not strengthened regional integration, economic transformation, or access to electricity and digital technologies.
Growing political and security expenses
and high levels of debt service relative todomestic revenue have constrained Chad'sability to improve basic services and infrastructure delivery.

Recent developments
Chad's GDP contracted by 1.2 percent (4.2
percent per capita) in 2021, following a 1.6

percent (4.6 percent per capita) contraction
in 2020. The passing of President Deby led
to economic disruptions in the second
quarter of 2021 as the new authorities consolidated power. Workers' strikes led tothe suspension of oil production on Esso
plants (one-fourth of Chad's production),
driving a decline in oil production of 8.2
percent over the year. Although the country suffered from food insecurity, due partly to weak cereal production after poor
rains, agriculture remained the main nonoil growth driver, contributing 1.9 percentage points (pp), while services contracted
4.4 pp. Export value increased by 55.3 percent due to the increase in oil prices (66.4
percent), helping the current accountdeficit narrow from 7.8 percent of GDP to
5.6 percent in 2021.
As containment measures on domestic
supply chains were slowly lifted, inflation
dropped from 3.5 percent to one percent in
2021. Food inflation was 3 percent, significantly lower than the rest of Sahel. Chad'smonetary and exchange rate policies aremanaged by the regional Central Bank,
which supported regional reserve accumulation by raising its policy rate to 3.5 percent and the marginal lending facility ratefrom 5 to 5.25 percent. As a result, regional
reserves increased to 3.4 months of imports from 3.1 months in 2020, thanks also
to regional fiscal consolidation policies andrising oil prices.
Despite a significant increase in oil prices,
the fiscal deficit, excluding grants, stood at
6.7 percent of GDP (4.3 percent including
grants) in 2021, due to the one-year lag inthe main component of oil-revenue taxation as well as an increase in security and

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

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

Percent, percentage points
6

Poverty rate (%)

Real GDP per capita (constant LCU)

100

45000049040000028035000007030000060-225000050-420000040150000

-6

30

-8

20

100000

10

50000

-10

2019

2020
2021
2022
2023
Fiscal balance (% of GDP)
Current account balance (% of GDP)
Real GDP growth

2024

0

0
2011

Source: World Bank

2013

2015

2017

18

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2019

political transition spending. Total public
debt slightly increased while debt services remained too high; the Government
has requested a debt restructuring under
the G20 Common Framework to help restore debt sustainability.
The extreme poverty rate (US$1.9/ day percapita, 2011 PPP) is projected to have increased by more than 2 pp between 2020
and 2021, reaching 37.8 percent, with thenumber of extremely poor increasing from
5.8 to 6.2 million. The COVID-19 crisis further impacted the livelihoods of poor andvulnerable households. In high-frequency
phone surveys in 2021, 76 percent ofhouseholds reported a loss in their total
household income and 21 percent ofhouseholds seeking health care could not
get access to it.

OutlookBased on current projections for oil
prices, the global recovery, and the Government’s gradual fiscal consolidation
program, the economy is expected to

grow by 2.8 percent in 2022 (-0.2 percent
per capita). The positive outlook for theoil sector, services, and agriculture should
strengthen over the medium-term, withgrowth averaging 3.7 percent per annum.
Higher global energy and food prices dueto the Russia-Ukraine war is projected toincrease inflation in 2022.
The current account balance is projected to
become positive, at 0.9 percent of GDP on
average over 2022-24, driven by increased
activity in the oil and services sectors. The
fiscal balance is expected to stand at 1.2
percent of GDP in 2022 and further improve in 2023-24 due to significant increases in oil revenues, more controlled security
spending and less political transition-related expenditures. However, Chad will stillneed a significant debt restructuring to service its debts while increasing social andinvestment spending needs, and to reduce
oil price volatility risk.
The extreme poverty rate is expected toincrease to 38 percent in 2022 due to negative GDP per capita growth. The number of poor will likely increase to 6.4 million. Continued high food inflation, lowcoverage of social protection programs,

TABLE 2 Chad / Macro poverty outlook indicatorsand lack of structural economic transformation will limit the space for poverty
reduction. The social protection systemshould be strengthened to extend its coverage and better target the poorest andmost vulnerable.
This outlook is subject to high uncertainty
and multiple downside risks, including increased political instability during a transition period, intensified security risks, further climate-related shocks, continuing
food security challenges, uncontrolled local COVID outbreaks, and widespread social discontent from food and general insecurity. At least one of these risks will likely materialize, and concurrent shocks are apossibility. The economic consequences of
the Russia-Ukraine war would primarilybe through higher global food (grains/fertilizer) and energy prices. The projections
already reflect recent sharp increases in oil
and gas, agriculture and metal and mineral prices since January 2022. Chad should
benefit from higher global oil prices anddirect this benefit towards inclusive
growth to reduce poverty.

(annual percent change unless indicated otherwise)
2019
3.2
1.4
1.7
6.6
6.0
4.0
3.3
0.1
7.3
2.5
-1.0
-4.9
-0.6
51.1
1.0
33.1
66.4
87.9
3.8
1.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.6
0.5
11.1
-14.7
1.1
1.8
-1.6
3.9
-0.1
-7.0
3.5
-7.8
1.2
49.9
2.9
35.5
68.2
88.9
4.0
1.5

2021e
-1.2
1.6
3.7
-4.5
-0.4
5.1
-1.2
6.2
-4.6
-4.4
1.0
-6.0
-4.3
52.1
-2.7
37.8
70.1
89.9
4.2
1.5

2022f
2.8
2.8
3.7
0.7
3.9
3.5
2.8
5.0
1.3
2.1
3.5
3.6
1.2
51.6
2.8
37.9
70.2
89.9
4.2
1.5

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

19

Apr 22

2023f
3.5
2.9
0.2
5.3
4.6
4.0
3.5
4.3
2.8
3.3
3.0
1.4
3.2
53.2
4.8
37.6
69.9
89.8
4.2
1.5

2024f
3.9
3.3
0.0
7.2
3.7
3.0
3.9
4.3
1.6
5.6
3.0
-2.1
3.1
47.6
4.7
36.9
69.3
89.5
4.2
1.4

COMOROS

Key conditions andchallenges

Table 1

2021

Population, million

0.9GDP, current US$ billion

1.3

GDP per capita, current US$

1444.6

International poverty rate ($1.9)

a

19.1
a

39.7

a

64.6

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

45.3

School enrollment, primary (% gross)

b

99.5

b

64.3

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

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

The COVID-19 is still weighing on Comoros, as the economy grew below its
potential in 2021. Driven by an expansionary fiscal policy, growth is expected
to pick up in 2022-2024. However, therecovery could be constrained. The
country, already at a high risk of debt
distress, is facing growing imbalances.
In addition, Comoros will however face
several external headwinds. Poverty will
decline in 2022 due to improvement ineconomic growth.

Comoros is a small and fragile islandwith significant structural challenges hindering its development. The GDP per
capita growth rate which was, around
0.5 percent, over the last two decades,
is a result of institutional and economic
weaknesses, poor infrastructure provision, and natural shocks.
Low domestic revenue mobilization, stemming from weak administrative capacity
as well as poor economic performance,translated into low human and physicalcapital. Consequently, between 2002 and2018, the country’s produced physical capital per capita declined by 27.7 percent
while the human capital wealth per capita
increased by only 0.16 percent. Thus, human and physical capital’s contribution to
Comoros growth has been marginal.
Growth is primarily led by private consumption, and private remittances are fueling the consumption-driven growth trajectory. On the supply side, growth isheavily driven by the service and agriculture sectors while there is an important untapped potential in the fishing and tourism
industries. Realizing a sustainable and inclusive growth would require tapping in
those industries while improving humanand physical capital, better leveraging thediaspora potential, and improving the institutional quality.
Comoros outlooks face several headwinds
related to the risks for additional inflation-

FIGURE 1 Comoros / Selected macroeconomic indicators

Percent of GDP

While Comoros has been relatively sparedby the COVID-19, the pandemic stillweighed on the economy through the impact of national restrictive measures on
consumption. Thus, driven by an expansionary fiscal policy and a sluggish private
consumption, the economy expanded by
2.4 percent in 2021. The service sector,
which was the main driver of the growth,recovered slightly, growing by 2.8 percent
in 2021 in comparison to -2.2 percent in2020. Compared to 2020, the poverty rate
remained stable at 39.7 percentage points
in 2021.
Moreover, the pandemic and its impacts
on the global supply chain fueled shortages and the inflation rate reached 7.1 percent (y-o-y) in December 2021 from -4.8
percent in December 2020. The price increase was primarily driven by food andnon-alcoholic beverage products (+12.2
percentage points), health prices (+7.6 percentage points) and transport prices (+5.3
percentage points). Though, it remained
low, on average, in 2021 (1.4 percent).
The expansionary fiscal policy led to ahigher fiscal deficit (2.5 percent of GDP in
2021 from 1.0 percent in 2020). This policy

Poverty rate (%)

Percent of GDP
1

35

0

30

-1

20

Recent developments

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

40

25

ary pressures that would reflect pricetrends in commodities and freight costs,
the possible spread of new COVID-19 variants that would restrain international travel and trigger stringent restrictions at thenational and global levels, and there is ahigh risk of sovereign debt distress.

Real GDP per capita (constant LCU)

70

50000060495000

-2

50

-3

40

490000485000480000

-4

15

30

-5

10

-6

5

-7

0

-8
2017

2018

2019 2020 2021e 2022f 2023f
Debt (% of GDP)
Current Account Balance (% of GDP, rhs)
Fiscal Balance (% of GDP, rhs)

47500020470000102024f

46500004600002014

Sources: National authorities, and staff estimates and forecasts.

2016

2018

20

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2020

was characterized by an increase in transfers (+0.7 percent of GDP) and capital expenditures (+4.5 percent of GDP). Moreover, the government kept the freight cost
valuation for imports to pre-March 2021
levels to reduce inflationary pressures.
The increased fiscal needs (13.0 percent of
GDP in 2021) stemming from this policy was financed by external partners (10.7
percent of GDP), including the WorldBank support for the vaccine rollout. The
deficit was contained through the implementation of some tax and customs administration reforms under the IMF Staff
Monitored Program. With a sluggish
growth and expansionary fiscal policy,
public debt increased to 24.9 percent of
GDP in 2021 from 22.1 percent in 2020.
There is a high risk of public debt distressdue to the signature of a non-concessionalloan for the tourism sector.
Following the decrease in remittances
and the increase in the import bill, Comoros recorded a deterioration of its current account deficit to 3.4 percent of GDP
in 2021, from 2.0 percent in 2020. However, Comoros’ overall external position
has marginally improved as reserves had

increased to 9.6 months of imports at
end-September 2021, in comparison with
9 months at end-2020. This improvementin the overall external position stems
from the Special Drawings Rights allocation of US$24 million.

Outlook
The economy is projected to expand by
2.8 percentage points in 2022 on the backof an expansionary fiscal policy. This
slow recovery also reflects difficulties inthe service sector that would grow below
its potential because of structural sectoralissues, existing COVID-19 restrictions,and a lower purchasing power due to increased inflationary pressures at the global and national levels. In fact, the Russian
invasion, war, and associated sanctions
will impede Comoros recovery throughits consequences on increased inflationarypressures, less remittances from France
which hosts a substantial share of the Comorian diaspora, and the resulting slower increase in the domestic demand. The

TABLE 2 Comoros / Macro poverty outlook indicators

economy is expected to grow at a rate of
3.4 percent in 2023-2024 when the vaccination rate will increase, and if advanced
economies fully recover, and tourists,
mainly the ones from the diaspora, canreturn to Comoros for the different cycles
of Grand Marriage.
A deterioration of the fiscal deficit is projected to increase to 4.9 percent of GDP
on the back of an increase in domestically financed investment. With an increasein the import bill due to the expansionary fiscal policy, and a decline of remittances, a deterioration of the external position is projected, and the current account deficit is forecasted to increase to
6.6 percent of GDP in 2022 and reach 7.0
percent in 2023.
Against this backdrop, the poverty rate is
expected to decrease only moderately overthe next two years. By 2023, poverty is projected to return to its pre-COVID levels at
39.5 percent (when measured against thepoverty line for lower middle-income
countries of USD 3.2 a day per capita in
PPP terms). Poverty rate is expected tocontinue to decrease to about 39.3 percent
in 2024.

(annual percent change unless indicated otherwise)
2019
1.8
3.8
3.5
-8.4
6.8
5.7
1.9
0.9
4.0
1.9
3.7
-2.4
-4.3
20.6
-4.1
18.4
38.9
63.9
3.5
42.4

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-0.3
3.8
4.1
-14.4
-46.3
-9.3
-0.8
4.3
-5.6
-2.2
0.8
-2.0
-1.0
22.0
-0.8
19.2
39.7
64.8
2.4
42.3

2021e
2.4
1.6
2.3
2.5
23.1
0.9
2.4
1.6
2.1
2.8
1.4
-3.4
-2.5
24.9
-2.2
19.2
39.7
64.7
2.6
42.5

2022f
2.8
2.1
12.1
6.2
28.4
13.8
2.8
-4.5
6.3
5.6
6.4
-6.6
-4.9
29.3
-4.5
18.9
39.4
64.6
3.2
43.0

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2014-EESIC. Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2014) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

21

Apr 22

2023f
3.1
4.6
-1.1
8.1
9.8
9.7
3.1
0.4
3.1
4.3
3.3
-7.0
-4.4
33.2
-3.7
18.6
39.0
64.2
3.1
43.4

2024f
3.7
3.3
5.3
-1.7
4.9
0.8
3.7
4.9
3.2
3.2
1.0
-6.3
-2.9
35.1
-1.9
18.1
38.2
63.8
3.1
43.8

DEMOCRATIC
REP. OF CONGO
Table 1

2021

Population, million

92.4

GDP, current US$ billion

59.5

GDP per capita, current US$

644.2

International poverty rate ($1.9)

a

77.2
a

91.4

a

97.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

42.1

School enrollment, primary (% gross)

b

118.5

b

60.7

Total GHG Emissions (mtCO2e)

683.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2012), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

Economic activity rebounded in 2021, withhigher prices and production of copper andcobalt lifting GDP growth to an estimated
5.7 percent and supporting a narrower current account deficit. Reserves increased,easing pressures on the currency and inflation. Fiscal consolidation was achieved despite higher social and infrastructure
spending. Continued uncertainty aroundthe pandemic and local and international
conflicts represent important risks togrowth and poverty reduction.

Key conditions andchallenges
The Democratic Republic of the Congo(DRC) has suffered from decades of conflict, poor governance, and volatile economic growth, which has led to persistently high levels of poverty. The economy ishighly dependent on mineral extraction:copper and cobalt constitute over 80 percent of exports, with China absorbing 40
percent of exports. With its huge agriculture potential untapped, DRC is a net foodimporter, which increases vulnerabilities
to external and climatic shocks. Structural
constraints have led to an underdeveloped
private sector and fostered a large informal
economy. Improving the business environment and closing gaps in infrastructureand human capital are needed to achieve
economic diversification and reduce commodity dependence.
DRC is led by a fragile coalition and political risks are high, a legacy of DRC’s
protracted periods of political unrest.
Reaching political consensus and increasing the presence and credibility of thestate, including through improved governance, will be key to maintain stability
and advance structural reforms that will
attract investments and create jobs. The
need for the state to deliver more and better services to citizens means that expenditure-led adjustments to revenue shortfalls or external conditions could jeopardize not only long-term growth prospects
and pro-poor spending but also politicalstability. Therefore, improving domestic
revenue mobilization to widen fiscal
space is crucial.
Poverty remains widespread, including inurban areas. Significant geographical disparities exist between provinces, with extreme poverty concentrated in central andnorthwestern provinces. DRC is second
only to Nigeria in Sub-Saharan Africa in
the number of extreme poor. Despite some
improvements in recent years, social andhuman development indicators remain
weak: in 2020, infant mortality was 63.8
per 1000 live births, higher than the SubSaharan average of 50.3, while the HCI of
0.37 is among the lowest of Sub-SaharanAfrican countries.

Recent developments
Economic activity in DRC recovered
strongly in 2021 with real GDP growthestimated at 5.7 percent. The mining
sector was a key driver of growth- copper and cobalt production rose by 12.0
and 7.6 percent, respectively, as domestic production capacity increased withthe launch in mid-2021 of the KamoaKakula mining project. The easing of
COVID restrictions, and higher revenues
from the mining sector, which also benefited from rising prices, supported
growth of non-mining sectors by 3.9
percent (2020: -1.3 percent).
The CAD narrowed to about 1.0 percent of
GDP in 2021 (2020: 2.2) due to improved
terms of trade and higher mining exports
volumes. Despite a small decline in foreign

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

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

Percent, percentage points

Poverty rate (%)

810017000095

160000

6.9
6

5.8

6.0

3.1

3.7

3.5

3.6

2.4
1.3

2.5

2.7

6.4 6.1

90

4.4

4
2

5.7

3.8 3.815000085

2.514000080

1.713000075

0-2Real GDP per capita (constant LCU)

12000070110000

65

-2.2

60

-4

10000020122015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Non-Mining
Mining sector
SSA growthGDP
Sources: Democratic Republic of Congo Statistical Authorities, World Bank.

2014

2016

2018

22

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2020

direct investment, the narrower current account and the IMF’s SDR allocation boosted international reserves, which reached
6.4 weeks of imports in 2021 (2020: 2.1
weeks). With a slower depreciation rate of
the CDF and a deceleration in inflation (to9.1 in 2021), the Central Bank progressively
cut its policy rate from 18.5 percent in January 2021 to 8.5 percent in mid-June 2021
and to 7.5 percent in early 2022.
Fiscal accounts were balanced in 2021
(2020: -1.2 percent) owing to higher revenues despite pressure on social and public infrastructure spending that lifted public expenditure up to 13.1 percent of GDP
in 2021 (2020:10.1). Domestic revenue collection increased to 11.2 percent of GDP(2020: 8.7) with higher income and valueadded tax collections and a better performance in non-tax revenue (of which mining revenue accounts for 30 percent).
The latest World Bank projections put
poverty at 72.1 percent in 2021, a 0.8
percentage points decrease compared to2020.1Despite adverse effects of the
COVID-19 pandemic, explaining a slight

1/ The projections, estimated using macroeconomic
forecasts, are preliminary and as more data come fromthe ground, poverty projections will be updated.

poverty increase in 2020 with job losses
and reduced food consumption for 10
and 20 percent of households, respectively, according to COVID-19 High Frequency Phone surveys in Kinshasa, favorable
economic prospects made it possible toreverse the trend by 2021.

OutlookGDP growth is estimated to accelerate to
6.4 percent by 2023 driven by the services
sector (mostly trade and telecommunication). The mining sector is expected to expand further in 2022 and pick up pace by2024 as Kamoa-Kakula - aiming to become
the second largest copper mine in theworld- enters its second phase of production in late-2022.
The fiscal deficit could widen to about 2.7
percent by 2022 as the government is likely
to provide some cushion to higher oil andfood prices. The CAD is projected to narrow further in 2022 with a slight surplus
estimated at 0.1 percent as higher commodity prices improve terms of trade(higher oil prices might accelerate further
the demand for cobalt, a key component inrechargeable batteries).

TABLE 2 Democratic Republic of Congo / Macro poverty outlook indicators
2019
4.4
17.3
6.6
6.3
1.4
25.2
4.6
3.1
4.1
5.7
4.7
-3.4
-2.0
19.5
-1.8
72.5
89.0
97.1
0.1
2.2

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Despite the lasting adverse effect ofthe pandemic, high population growth,and the Russian invasion, extreme
poverty is projected to decrease by 2.8
percentage points by 2024 given favorable economic prospects.
DRC’s economy remains vulnerable tocommodity price movements and growth
performance of its major trading partners
which might be disturbed by geopoliticalconflicts and a resurgence of the pandemic.
The economic consequences of the Russian
invasion and associated sanctions, throughrising global food costs and higher oil
prices, could exert strong pressure on inflation and on households’ consumption,
raising the burden on expenditures by up
to 15 percent and subsequently reducing
private consumption growth.
With the agriculture sector employing over
60 percent of the working age population,
vulnerability to climate change relatedrisks (floods, droughts) is substantial. Finally, continued political uncertainty
ahead of planned 2023 presidential elections, might delay reform efforts, worsen
fiscal imbalances and generate arrears.
DRC’s immediate challenge is to maintain
political and macroeconomic stability
while stepping up ongoing reforms to ensure sustainable growth.

(annual percent change unless indicated otherwise)
2020
1.7
-8.0
4.1
31.3
8.0
12.0
2.3
2.5
4.2
0.1
11.2
-2.2
-1.2
22.4
-1.0
72.9
89.2
97.2
0.0
2.2

2021e
5.7
1.6
20.9
33.6
14.9
30.7
5.6
2.4
6.6
5.6
9.1
-1.0
0.0
21.7
0.2
72.1
88.9
97.1
0.2
2.3

2022f
6.0
1.5
11.7
13.1
12.5
11.4
5.9
2.5
7.2
5.7
9.5
0.1
-2.7
21.2
-2.2
71.1
88.4
96.8
0.2
2.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2012-E123. Actual data: 2012. Nowcast: 2013-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2012) with pass-through = 0.7 based on GDP per capita in constant LCU.

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Apr 22

2023f
6.4
2.0
2.6
17.2
8.0
12.4
6.2
2.6
7.5
6.1
7.0
-0.5
-1.6
19.8
-1.1
70.1
87.8
96.5
0.1
2.4

2024f
6.1
2.2
7.2
11.3
8.0
8.7
6.0
2.7
7.0
6.0
6.0
-0.8
-1.1
16.0
-1.1
69.2
87.3
96.3
0.1
2.4

REPUBLIC OFCONGOTable 1

Key conditions andchallenges
2021

Population, million

5.7

GDP, current US$ billion

12.1

GDP per capita, current US$

2132.9International poverty rate ($1.9)

a

39.6
a

64.1

a

83.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

48.9

School enrollment, primary (% gross)

b

93.7

b

64.6

Total GHG Emissions (mtCO2e)

20.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2011), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

The Republic of Congo’s (ROC) economy contracted by an estimated 3.5 percent in 2021. The poverty rate increased
from 51.9 percent in 2020 to an estimated 53.9 percent in 2021. The ROC
is expected to make a gradual recovery
from the COVID-19 crisis, with GDP
growth projected at 3.7 percent in2022-24. A prolonged war in Ukraine
could increase inflationary pressures in
the country, but high oil prices may further sustain the recovery.

The Congolese economy, which is highly
oil-dependent, has been contracting since
the fall of oil prices in mid-2014, with GDP
growth averaging -4.8 percent in 2015–21.
The exposure to large swings in oil prices
and weak governance, reflected in highlevels of non-concessional borrowing, led
the debt to become unsustainable and thecountry into debt distress, with its debt-toGDP ratio increasing from 42.3 percent in2014 to 113.2 percent in 2020. While debt
restructuring agreements concluded in
2021, higher oil prices, and improved debt
management (including restricting new
external financing on concessional terms)
have restored debt sustainability, ROC
however remains in debt distress due tooutstanding arrears with some externaland domestic creditors. Natural resource
revenues have not translated into higher
income per capita growth, and human capital development remains below that ofpeer countries, owing to low government
spending efficiency and weak governancein key sectors. The proportion of the population living below the international extreme poverty line of US$1.90 PPP per day
increased from 39.1 percent in 2015 to 53.9
percent in 2021, with the poverty rate increasing by 5.2 percentage points between
2019 and 2021 alone, driven by the pandemic. The social and economic cost of
COVID-19 further highlights the importance of reforms to protect and develop

human capital and infrastructure, as wellas to improve the business environment
for faster, sustained, and inclusive economic growth. The pandemic continues tobe a risk to the ROC’s economic stability,
especially given the slow pace of vaccination, with only about 12 percent of the population fully vaccinated as of March 17,2022. Diversifying the economy away fromoil remains a key challenge to reduce thecountry’s vulnerability to volatile oil prices
and production, which was highlighted by
the 6.2 percent economic contraction
recorded in 2020.

Recent developments
The Congolese economy is estimated tohave contracted by 3.5 percent in 2021, a
deeper recession compared to the WorldBank fall forecast of -1.2 percent, owing tolower-than-expected oil production. Despite higher oil prices and increased global demand, oil production declined by
10.8 percent, year-on-year, in 2021 due
to postponed investments, technical challenges, and maturing oil fields. By contrast, non-oil growth reached an estimated 3.4 percent in 2021, the first year of
growth since 2014, driven by the resumption of economic activities (following thesignificant disruptions caused by the pandemic), increased use of locally sourced
inputs by large firms, and progress in therepayment of domestic arrears. The overall GDP growth contraction resulted in
an increase in extreme poverty from 51.9
percent in 2020 to 53.9 percent in 2021.

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

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

Percent, percentage point
10

Poverty rate (%)

Real GDP per capita (constant LCU)

100

1400000

8
61200000

80

1000000

4
2

60

80000040

6000000-2-4400000-620200000

-8
-10
-12
-14

Oil GDPNon-oil GDP

Net Taxes

Real GDP00

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
International poverty rate
Upper middle-income pov. rate

2015 2016 2017 2018 2019 2020 2021e 2022f 2023f 2024f

Source: World Bank.

Source: World Bank. Notes: see table 2.

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Apr 22Lower middle-income pov. rate
Real GDP pc

Overall inflation remained contained at
2.0 percent in 2021, but disruptions in
global supply chains and high international commodity and agricultural prices
exerted inflationary pressures on domestic food prices, which increased by about
3.4 percent, especially affecting the poor.
Despite the fall in oil production, government revenues increased due to higher oil
prices, which, together with a moderationin public spending, led to a fiscal surplus
estimated at 2.1 percent of GDP in 2021
(compared to a deficit of 2.4 percent of
GDP in 2020). Public debt fell sharply from
113.2 percent of GDP in 2020 to 98.5 percent of GDP in 2021, driven by high external debt service payments tied to oil prices
and the increase in nominal GDP. In theexternal sector, high export receipts resulting from higher oil prices led to an estimated current account surplus of 9.0 percent of
GDP in 2021 (compared to a surplus of 0.9
percent of GDP in 2020). The Bank of Central
African States tightened its monetary policyin late 2021 over concerns about the evolution of foreign exchange reserves, which,despite higher oil prices and the International Monetary Fund’s 2021 Special Drawing Rights allocation (equivalent to US$1.4
billion), represented just above 3 months’
worth of the region’s imports of goods andservices by end-December 2021 (roughly
the same as by end-December 2020).

Outlook
The ROC is expected to gradually recover from the COVID-19 crisis, with GDP
growth projected at 3.5 percent in 2022
and an average of 3.8 percent in 2023-24.
Oil sector growth (expected at 4.0 percent in 2022 and an average of 4.9 percent in 2023-24) would be driven primarily by the resumption of investments byoil companies, including for asset maintenance, which had been postponed due tothe pandemic and negotiations with oilcompanies over taxation arrangements.
Non-oil economic growth (expected at
3.0 percent in 2022 and 2.5 percent, on
average, in 2023-24) will be spurred by
the removal of COVID-19 restrictions inearly 2022, continued progress in repayment of domestic arrears, and the resumption of public investments (partially
due to an increase in fiscal space fromhigher oil revenues). However, the war
in Ukraine may also translate into higher
inflation of about 2.8 percent in 2022
and an average of 3.0 percent in 2023-24.
Food inflation is expected to rise evenhigher, impacting the country’s food security, given that food accounts for about
30 percent of the ROC’s merchandise imports. The poverty rate is expected to

TABLE 2 Republic of Congo / Macro poverty outlook indicators(annual percent change unless indicated otherwise)
2019
-0.1
1.6
-18.7
-2.3
7.4
3.2
-0.6
0.2
0.2
-1.8
2.2
-0.8
3.4
3.4
81.9
8.0
48.7
72.1
89.6
2.3
21.3

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)slightly decline to an average of 53.4 percent in 2022–24, consistent with GDP per
capita growth. The return of real GDP
per capita to the pre-COVID level of
US$1,800 by 2030 will require the economy to grow by 4.5 percent, on average,
starting in 2025. Meanwhile, the poverty rate is projected to return to pre-pandemic levels by 2028.
The fiscal balance is expected to remain
positive at 4.1 percent of GDP in 2022
and an average of 2.3 percent in 2022–24
due to higher oil revenues, fueled byhigher oil prices (resulting from the conflict in Ukraine) and improved non-oil
revenue mobilization (resulting from tax
administration reforms). Higher oil prices
are also projected to widen the current
account surplus to 15.3 percent of GDP
in 2022, before it narrows to an averageof 4.6 percent of GDP in 2023-24, as investments in new oil fields will lead toan increase in equipment imports.
Downside risks include uncertainties related to the pandemic and oil production. A
prolonged war in Ukraine represents bothdownside and upside risks. While it would
further raise international agricultural
prices, adding substantial inflationarypressures, it could also sustain high oil
prices, potentially strengthening the economic recovery.

2020
-6.2
-6.9
-33.1
-45.0
-11.1
-36.3
-5.1
4.5
-3.7
-9.2
1.4
0.9
2.4
-2.4
113.2
-0.6
51.9
74.1
90.9
-1.2
19.9

2021e
-3.5
7.5
9.7
12.7
-9.6
5.0
-3.5
1.5
-9.2
3.9
2.0
9.0
5.5
2.1
98.5
4.3
53.9
75.8
91.5
0.1
19.5

2022f
3.5
5.0
9.4
6.9
4.7
11.0
3.5
2.7
4.0
3.0
2.8
15.3
5.0
4.1
82.6
6.0
53.6
75.5
91.5
1.5
20.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2011-ECOM. Actual data: 2011. Nowcast: 2012-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2011) with pass-through = 0.7 based on GDP per capita in constant LCU.

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Apr 22

2023f
3.0
4.5
4.6
10.9
3.4
9.8
3.0
2.1
3.5
2.6
3.0
6.6
5.7
2.8
77.6
4.7
53.5
75.5
91.4
1.4
20.7

2024f
4.5
5.5
4.1
10.9
6.0
11.5
4.5
2.0
6.3
2.7
3.0
2.7
5.9
1.9
71.9
3.5
52.9
74.8
91.1
1.8
21.6

CÔTE D'IVOIRE
Table 1

2021

Population, million

27.1

GDP, current US$ billion

66.2

GDP per capita, current US$

2445.4

International poverty rate ($1.9)

a

9.2
a

34.9

a

67.4

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

37.2

School enrollment, primary (% gross)

b

100.5

b

57.8

Total GHG Emissions (mtCO2e)49.3

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

The recovery in 2021 registered 7.0 percent growth (4.4 percent per capita), witha rebound in domestic demand. Inflation
reached a 10-year high, casting a shadow
over the gains for poor households. Headwinds prevail in the short-term from thesurge in global commodity prices, thetightening of financial markets, and supply-side disruptions resulting from the
Ukraine conflict, along with heightened
geopolitical and security tensions fromthe Sahel.

Key conditions andchallenges
One of the fastest-growing economies in
sub-Saharan Africa for almost a decade with real GDP growth averaging 8.2 percent annually over 2012–19 (5.7 percent inper capita terms) - Cote d’Ivoire exits theglobal COVID-19 crisis facing a renewed
imperative: addressing bottlenecks to enable structural transformation and sustain
inclusive growth. Total factor productivity
growth has remained flat since 2017, andeconomic complexity has stalled, below
the level expected for its income level. The
informal sector, although shrinking, stillaccounts for up to 40 percent of GDP.
Aiming to double GDP per capita by
2030, the authorities adopted the National
Development Plan (NDP) 2021-2025 in
December 2021, based on leveraging private investment, capital deepening, improvements in human capital, addressing
climate risks, and strengthening governance. Improving factor accumulation
while reducing allocative inefficiencies
created by market distortions should improve productivity, and support the development of higher-value added sectors
in services and manufacturing.
Downside risks in the short term haverisen due to the Ukraine conflict’s impact on global commodity prices andsupply-side disruptions to agricultural
inputs. A tightening of global financial
conditions could increase debt vulnerabilities, while higher oil and food prices

will continue fueling inflationary pressures. While the vaccination rollout isamong the highest in West Africa, vulnerabilities from new infection waves remain. Heightened regional and security tensions and climate-related factors
could also dampen the outlook. In themedium term, the roll out of the NDP
will depend on adequate financing,premised on greater domestic revenue
mobilization and private financing.

Recent developments
The economy rebounded strongly from the
COVID-19-induced slowdown in 2020,
aided by fiscal and monetary policy support and less disruptive containment measures. Real GDP growth is estimated at 7.0
percent in 2021 (4.4 percent in per capita
terms) against 2 percent in 2020 (-0.6 percent in per capita terms), owing tostronger-than-expected domestic demand.
Private consumption and investment were
supported by strong credit (+13 percent)and employment (+7.5 percent) growth;
while public consumption and investments remained high. Net exports were
negative at end-November, as exports ofcocoa and cashew nuts were offset by investment-driven imports (+15.1 percent).
The supply side was marked by a strong
expansion in commerce and services, including trade and telecom despite temporary disruptions in electricity supply
caused by climate-related factors in thefirst half of the year. Agriculture’s performance was more mixed with weak food

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

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

Percent, percentage points
20

Poverty rate (%)

15
10
5
0
-5
2015
Gov. cons.
Inventories
Statistical disc.

2018

2021
Exports
Private cons.
GDP

Real GDP per capita (constant million LCU)

90

1.80

80

1.60

70

1.40

60

1.20

50

1.00

40

0.80

30

0.60

20

0.40

10

0.20

0

2024

0.00
2008

GFCF
Imports

Source: World Bank.

2010

2012

2014

2016

26

Apr 22

2020

2022

2024

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2018

crop production contrasting that of export
crops. The current account deficit is expected to have widened to 3.8 percent of
GDP in 2021 from 3.2 percent in 2020, reflecting lower trade surplus and higher
primary and secondary deficits due to lower official grants and net remittances flows
as well as higher interest payments.
Inflation reached a 10-year high of 4.2 percent, 1.2 percentage points above the regional target, mainly driven by foodstuffs
because of a water deficit that affected production, and disruptions in the cultivation
schedules of some crops because of mobility restrictions lingering since 2020 and increased security in the northern borders.
Côte d’Ivoire’s monetary and exchange
rate policies are managed by the Central
Bank of West African States (BCEAO),
which maintains a fixed peg between the
CFA Franc and the Euro. Its reserves
reached 5.8 months of imports in 2021 owing to increased exports, the August 2021
SDR allocation, and Eurobond issuances in
the region (by Benin, Côte d’Ivoire, Senegal and the BOAD).
High expenditure levels to support economic recovery were offset by higherthan-expected revenue collection, allowing for a decline of the fiscal deficit to
5.1 percent of GDP in 2021. Tax revenues
significantly increased (+20 percent yoy),exceeding the annual target by more than
15 percent, mostly due to tax buoyancy.
Meanwhile, expenditure increased on account of further security and healthneeds, and public investment. Capital expenditure outpaced their target by 20.3
percent, linked to PND projects. Increased financing needs were covered byrecourse to the regional market, the allocation of IMF SDRs (1.3 percent ofGDP) and Eurobond issuances. As a result, public debt also increased to 52.6
percent of GDP.
The incidence of extreme poverty measured with the US$1.9 a day per capita(2011 PPP) international poverty line declined from 8.95 percent in 2019, to 8.75
percent in 2021, slightly higher in comparison to pre-COVID (2019) poverty projections of 8.6 percent. The recent inflation
spike is estimated to have increased extreme poverty rate by 0.2 ppt point overthe 2020-21 period.

OutlookThe medium-term outlook is broadly positive, supported by the PND and a commitment to macroeconomic stability, but real GDP growth is projected to decelerate

TABLE 2 Côte d'Ivoire / Macro poverty outlook indicators

in 2022 due to the Ukraine conflict and its
global effects. Trade flows with Ukraine
and Russia are small, but the indirect impact through higher food and fuel prices
would still impact the external and real
sectors. The current account deficit should
widen due to higher import prices in the
short term. Coupled with worsening regional tensions and insecurity on thenorthern borders compounding supply
disruptions, inflation could become a major threat forcing the BCEAO to tightenmonetary policy earlier, increasing financing costs of domestic debt.
The fiscal deficit is now expected to increase in 2022, with fiscal consolidation delayed as a result of the external shock. It
should converge towards the WAEMU target of 3 percent of GDP one year later, in
2025, with PPG debt only gradually stabilizing around 52 percent of GDP in
2023-24. In the medium term, creating fiscal space and preserving debt sustainability would require additional revenue mobilization. Increased borrowing in the domestic market could potentially crowd out
private investment. Poverty alleviation
should continue in the medium term on
the back of the economic recovery and therollout of the new social development plan
(PSGOUV2).

(annual percent change unless indicated otherwise)
2019
6.2
6.0
4.1
5.5
5.7
4.4
6.3
5.3
11.5
4.7
0.8
-2.3
1.3
-2.3
38.8
-0.8
8.9
34.5
66.6
0.3
21.3

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
2.0
1.9
0.3
12.2
-1.3
8.8
2.0
2.7
1.6
1.9
2.4
-3.2
1.2
-5.6
47.6
-3.7
9.0
34.5
66.7
-0.5
20.2

2021e
7.0
5.0
1.3
21.3
3.7
12.7
7.0
1.9
6.2
8.7
4.2
-3.8
1.5
-5.1
52.0
-3.0
8.8
34.1
65.9
-0.4
19.6

2022f
5.7
4.2
3.1
9.1
9.8
9.2
5.7
2.0
6.6
6.4
5.5
-4.7
1.3
-5.7
52.6
-3.4
8.5
33.7
65.0
-0.3
18.8

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2015-ENV and 2018-EHCVM.Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using point to point elasticity at regional level with pass-through = 1 based on GDP per capita in constant LCU.

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2023f
6.8
4.5
2.1
7.8
17.1
10.8
6.8
2.8
10.0
6.6
3.5
-4.2
1.4
-4.8
52.7
-2.8
8.3
33.3
64.2
0.3
18.1

2024f
6.6
4.3
-0.2
6.0
15.6
7.5
6.6
2.9
10.9
5.8
3.0
-4.0
1.7
-3.9
51.8
-2.1
8.0
32.8
63.4
0.0
17.3

EQUATORIALGUINEA
Table 1

Key conditions andchallenges
2021

Population, million

1.5GDP, current US$ billion

10.7

GDP per capita, current US$

7408.7

School enrollment, primary (% gross)

a

61.8

a

58.7

Total GHG Emissions (mtCO2e)

20.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ WDI for School enrollment (2015); Life expectancy(2019).

The economy is estimated to have recorded its seventh consecutive year of negative
growth in 2021 amid disappointed hydrocarbon production. Barring new substantial hydrocarbon discoveries, growth isprojected to remain negative over the
medium term. Uncertainties related to
the Russian invasion of Ukraine, alongwith a deterioration of the financial sector
and fiscal position associated with a prolonged COVID-19 crisis, represent downside risks to the outlook. There are no reliable data to track poverty.

Since the oil price drop in 2014, Equatorial Guinea’s economic growth has been
negative amid a declining trend of thedominant hydrocarbon sector. While thecountry is classified as upper-middle-income, the long recession has likely curtailed progress in shared prosperity andpoverty reduction, with GDP per capita
growth averaging -6.1 percent over the
past decade. Human capital outcomes are
weak and undermined by insufficient social spending and poor public service delivery. Public health spending represents
only 0.7 percent of GDP, significantly
lower than the average of 3.3 percent of
GDP for upper-middle-income countries,
while life expectancy at birth is low atonly 58.9 years. The unfavorable business environment and poor governance(with corruption perception levels among
the worst in the world) weigh down private sector development. The dependency on the hydrocarbon sector has madethe country highly vulnerable to volatile
oil prices, and the social and economic
toll of COVID-19 has highlighted the urgent need to diversify the economy awayfrom the hydrocarbon industry.
Poverty is likely to have increased during
the COVID-19 pandemic, with phone surveys conducted in 2020 showing a significant impact on employment and schooling. Indeed, almost half of the working
population stopped working for up to 6

months during the crisis, and only 14 percent of students continued their education(either in person or from home). In the context of data paucity to track poverty, theLiving Standard Measurement Survey (expected in 2022) will be key to benchmark
poverty incidence.

Recent developments
The economy is estimated to have remained in recession in 2021 as GDP
contracted by an estimated 1.6 percent(an improvement from a contraction of
4.9 percent in 2020), mainly due to a
decline in hydrocarbon production (despite positive performance in liquified
natural gas [LNG]). A new wave of
COVID-19 at the end of the year, a
slowdown in construction (due to moderate public investment), and the Bata
explosions (which occurred in March
2021 and caused widespread damage
in Equatorial Guinea’s largest city) also
contributed to dampening economic
growth. The revival of the service sector
that followed the end of mobility restrictions, including the full reopening of international borders, limited the extent of
the economic downturn.
Notwithstanding higher global foodand energy prices, inflation rate inEquatorial Guinea is estimated at 1.8
percent in 2021 (lower than 4.8 percent
in 2020), driven mainly by the phasingout of restrictive COVID-19-related
measures. The authorities made timid
progress on the gradual repayment of

FIGURE 1 Equatorial Guinea / Hydrocarbon production (inthousands of barrels per day of oil equivalent)

FIGURE 2 Equatorial Guinea / Non-income poverty
indicators

Thousands of barrels

Percentage points
250%

310000EQG relative to Sub-Saharan Africa average
200%

290000270000EQG relative to Middle income countries
average

150%

250000100%

23000021000050%

1900000%Mortality rate, under- Maternal mortality Prevalence of anemia
5 (per 1,000 live
ratio (modeled
among children (% ofbirths)estimate, per 100,000 children ages 6-59
live births)
months)170000150000
2020

2021e

2022f

2023f

2024f

Sources: National authorities and World Bank.

Source: World Bank.

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Apr 22

domestic arrears (currently at 36 percent of total public debt), helping togradually reduce the share of non-performing loans and improve the liquidity and solvency of the banking sector.
More favorable oil prices (resulting inhigher oil revenues), coupled with government expenditure moderation (in particular public investment), significantly
improved the government’s fiscal position compared to the previous year, withthe fiscal deficit narrowing from 3.3 percent of GDP in 2020 to 1.2 percent of
GDP in 2021. In addition to higher yearon-year oil exports in 2021, lower imports also had a favorable impact on theexternal deficit, which narrowed to 2.4
percent of GDP (from 10.9 percent of
GDP in 2020).
The Bank of Central African States tightened its monetary policy in late 2021
over concerns about the evolution of foreign exchange reserves, which, despite
higher oil prices and the International
Monetary Fund (IMF) 2021 Special Drawing Rights (SDR) allocation (equivalent
to US$1.4 billion), represented just above

3 months’ worth of regional imports ofgoods and services by end-December
2021 (roughly the same as by end-December 2020).

Outlook
Economic growth is expected to rebound in 2022 (1.8 percent) due to higher hydrocarbon production (especially
LNG) and sustained high oil and gas
prices owing to the conflict in Ukraine,
which should have positive spillover effects on domestic demand. Barring new
substantial discoveries, hydrocarbon
production will continue to decline assome of the country’s largest oil fields
are reaching maturity. As a result, GDP
growth is projected to contract by an average of 2.4 percent in 2023-24. In theabsence of significant diversification efforts or investments into new hydrocarbon reserves, GDP per capita will takenearly two decades to return to its prepandemic level.

TABLE 2 Equatorial Guinea / Macro poverty outlook indicators(annual percent change unless indicated otherwise)
2019
-6.0
3.4
-4.5
-55.8
-6.2
-9.0
-6.0
-5.8
-8.7
-1.2
1.2
-1.6
5.3
2.0
45.9
2.7
-8.5
21.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

The outlook could worsen if the global
COVID-19 crisis lingers and the government fails to resolve the elevated outstanding arrears, which could intensify financial
sector risks. Moreover, international donor
budget support may fail to materialize (inparticular, IMF lending program-related
disbursements) if progress on key fiscal
and governance reforms remains slow. Finally, negative medium-term growthprospects and associated rising fiscal pressures could hamper the government’splans to raise social spending, undermining social outcomes. Upside risks include
the use of the IMF SDR allocation to resolve government arrears and strongerthan-projected oil revenues stemmingfrom both higher-than-expected oil prices
and oil production. A prolonged war in
Ukraine presents both downside and upside risks. While it would raise international agricultural prices (adding inflationarypressures in Equatorial Guinea), it could
also sustain high oil prices (which would
increase oil revenues).

2020
-4.9
3.4
-5.3
-42.1
-9.0
-7.8
-5.0
0.4
-6.8
-2.1
5.8
-10.9
3.9
-3.3
52.3
-2.0
-2.5
17.4

2021e
-1.6
1.0
2.3
-18.0
-1.7
2.0
-1.6
2.8
-0.6
-3.5
1.8
-2.4
5.9
-1.2
47.4
0.4
-0.1
18.2

2022f
1.8
1.4
0.4
-6.0
2.9
2.0
1.9
1.4
3.0
0.0
2.8
1.4
5.0
-0.6
43.2
0.8
0.5
19.4

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.

MPO

29

Apr 22

2023f
-2.6
1.2
-8.5
-17.0
-0.8
1.0
-2.6
1.4
-2.0
-4.0
2.5
-1.2
5.4
-1.4
47.9
0.2
-1.0
19.5

2024f
-2.1
0.7
-5.8
-20.0
-0.9
0.5
-2.1
1.4
-2.4
-1.7
2.5
-2.1
5.6
-1.5
45.9
0.1
0.6
20.8

ERITREA

Key conditions andchallenges

Table 1

2021

Population, million

3.6

GDP, current US$ billion

2.3

GDP per capita, current US$

632.6

School enrollment, primary (% gross)

a

68.4

a

66.3

Total GHG Emissions (mtCO2e)

8.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ WDI for School enrollment (2018); Life expectancy(2019).

Real GDP rebounded by 2.9 percent in
2021 after a 0.6 percent contraction in
2020, aided by external demand uptake
and resumption of domestic activity. A
significant boost to growth is expected in
2022 from new mining developments andrising prices of mineral exports. However,rising food inflation, climate vulnerabilities and geopolitical tensions cloud the
medium-term outlook. National accounts
and poverty statistics have not been produced over the last decade.

After UN sanctions were lifted in November 2018, Eritrea started emerging from a
decade of international isolation. Efforts toshift from a centrally planned to a marketled economy have been slow and sporadic,
and large SOEs dominate economic activity. Monetary policy is characterized by administrative measures, fiscal dominance,
and a fixed exchange rate regime pegged
to the US dollar, enabled by severe import
restrictions in a context of low foreign exchange reserves. The banking systemlargely lends to government and lacks international correspondent banks, while
payment and settlement systems are absent. The country is among the most vulnerable and least adapted to climatechange in Sub-Saharan Africa, and frequent weather shocks pose a heavy burden
for the economy and rural livelihoods. The
mining sector, which started operating in
2011, accounts for over 90 percent of totalexports, yet contributions to budget revenues are limited.
The Covid-19 crisis hit Eritrea amid a hiatus in its reengagement with development
partners, leaving it without needed external funding. In addition, informal crossborder trade was affected by the conflict innorthern Ethiopia. Yet, Eritrea’s isolation
moderated the magnitude of the initial external shock.
The emergency conditions prevailing in
the country over the past decade have

led to data production capacity constraints. National accounts data are limited to unofficial GDP estimates by the
Ministry of Finance, inflation estimatescover only the capital, Asmara, and fullbalance of payments accounts are missing. The last population census in Eritrea
took place more than 25 years ago.
Therefore, little is known about poverty.
Data from 1996/97, covering only urban
areas, suggests that poverty was widespread with around 70 percent of the
population living in poverty.

Recent developments
After contracting by 0.6 percent in 2020
amid the Covid-19 crisis, real GDP rebounded by an estimated 2.9 percent in
2021, supported by external demand uptake and the resumption of economic activity as the restrictions imposed at theonset of the pandemic were lifted. Inflationary pressures that build up following
the closure of the border with Ethiopia after its temporary opening for two months
in 2019 eased in 2021, and inflation hovered at 4.5 percent. The external current
account surplus increased to 13.6 percent
of GDP in 2021 from 11.4 percent the year
before as commodity exports grew fasterthan the recovering imports. Reserves are
estimated to hover at about two monthsof imports.
The UN Food and Agriculture Organization said in early March 2022 that thedesert locust upsurge that ravaged theHorn of Africa for more than two years

FIGURE 1 Eritrea / Evolution of total public debt

FIGURE 2 Eritrea / Primary and overall fiscal balances

Percent of GDP
350

Percent of GDP
6

300

4

250

2

200

0
150

-2

100

-4

50
0

2017
2018
Domestic debt

2019

2020
2021e
External debt

-6

2022p
2023p
Total public debt

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

2017

2018
2019
2020
2021e
2022p
Overall fiscal balancePrimary fiscal balance

2023p

Sources: Ministry of Finance, Planning and Economic Development, World Bank
staff estimates.
30

Apr 22has ended as drier conditions prevail, but
recommended vigilance as few residual
infestations may linger. As part of efforts
to reinvigorate the partnership between
the UN and Eritrea and prepare for a
new Sustainable Development Cooperation Framework for 2022-2026, a 24-person mission to Asmara led by UN Regional Directors took place end-January
2022,
with
discussions
covering
COVID-19 vaccination, regional dynamics
in the Horn of Africa, regional trade integration and ACFTA, human rights, climate action, and data for development.
However, Eritrea remains mostly isolated
internationally. On November 12, 2021,
the US imposed sanctions on four prominent Eritrean entities and two individuals
in response to their role in the ongoing
human rights crisis in Ethiopia.
The rebounding economic activity supported stronger revenues in 2021, drivinga decline of fiscal deficit to 3.7 percent
of GDP from 4.2 in 2020. Construction
work associated to the Colluli and Asmara mines continued to drive capital expenditures. Public debt is estimated ataround 243 percent of GDP, of which
nearly 80 percent is owed to domestic
banks. However, fiscal and domestic debt

outcomes remain uncertain given frequent data revisions due to reporting lags
driven by widespread manual processes.

OutlookReal GDP growth is expected to accelerate
to 4.7 percent in 2022 as the Colluli andAsmara mines start exporting at full capacity. Rising international prices of zinc,gold and copper, which jointly account forover 90 percent of Eritrea’s exports, will
strengthen the current account and soften
the negative impact from rising prices ofoil and wheat, which are among the country’s top imports, stemming from the Russia-Ukraine war. Similarly, the hike inpotash prices, which have trebled over the
past year and have low prospects of coming down soon as sanctions weigh heavily
on Russia and Belarus, the second andthird world producers of the commodity,
could further boost Eritrea’s growth andexternal accounts, bolstering government
revenue and providing much needed foreign exchange. However, the increasing
food inflation and possible shortages ofkey commodities will weigh negatively on

TABLE 2 Eritrea / Macro poverty outlook indicators

household’s consumption, exacerbating
poverty and food insecurity. Over the
medium term, growth could continue inthe range of 3.6 to 3.8 percent, supported
by sustained mineral exports and potential
spillovers from the new potash mine to fertilizer production, which could enhance
agricultural productivity, improving livelihoods and food security.
Nevertheless, downside risks are significant. Rising global geopolitical tensions
and new Covid-19 variants could further
reduce global growth, negatively impacting exports. Eritrea’s continued involvement in the northern Ethiopia conflict
could attract renewed international sanctions, while escalation of war in Europe
could further push up oil and wheat
prices, with potentially dire effects onpoverty and food insecurity. The absenceof a Covid-19 vaccination campaign
heightens risks to lives and livelihoods,
while severe climate vulnerabilities thatburden Eritrea could worsen in coming
years. The fragile macroeconomic situationand severe credit constraints leave thecountry with little space to boost preparedness facing these risks, and to control damages should they materialize.

(annual percent change unless indicated otherwise)
2019
3.8
5.5
39.3
67.5
-5.0
1.4
3.7
27.0
13.0
-26.0
-16.4
13.0
3.9
0.7
269.5
2.5
4.3
26.1

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-0.6
-1.9
16.4
152.2
-5.4
-3.5
-0.7
-0.5
-0.7
-1.1
4.8
11.4
3.8
-4.2
260.7
-2.6
-2.8
26.3

2021e
2.9
3.0
9.9
39.1
49.7
42.6
2.9
4.5
1.4
2.0
4.5
13.6
3.7
-3.7
242.7
-2.3
3.1
26.6

2022f
4.7
7.2
3.5
-18.0
25.7
28.0
4.7
3.1
10.2
0.6
6.2
13.6
3.4
-0.8
215.4
0.6
4.9
27.5

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.

MPO

31

Apr 22

2023f
3.6
5.6
4.0
1.6
3.8
2.0
3.6
2.5
7.6
0.2
3.5
13.3
3.3
0.3
198.9
1.4
3.7
27.8

2024f
3.7
5.9
2.2
1.3
1.6
3.1
3.7
3.3
6.7
0.3
2.2
12.4
3.2
1.0
186.6
2.1
1.0
28.5

ESWATINI

Key conditions andchallenges

Table 1

2021

Population, million

1.2

GDP, current US$ billion

4.7

GDP per capita, current US$

4009.7

International poverty rate ($1.9)

a

29.2
a

52.1

a

72.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

54.6

School enrollment, primary (% gross)

b

114.5

b

60.2

Total GHG Emissions (mtCO2e)

3.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2011 PPPs.
b/ Most recent WDI value (2019).

GDP growth is estimated to have rebounded to 3.1 percent in 2021, reflecting
the easing of COVID-19 restrictions andsubsequent boost on external demand.
The fiscal deficit declined in 2021, as thegovernment implemented expenditure
cuts in line with its three-year fiscal adjustment plan. Poverty remains stagnant
due to slow growth of per capita GDP.
The economy is projected to continue torecover in 2022, albeit at a slower pace,slowing poverty reduction.

Eswatini has largely relied on government
investment and consumption to drive
growth since the end of apartheid in South
Africa, as foreign private investment declined and relocated back to South Africa.
Private investment remains constrained byan unfavorable investment climate andgovernance challenges. The risk of recurrence of political unrest in Eswatini andheightened global risks create uncertainty
for medium-term private sector investment and economic growth.
The fiscal situation has been fragile due tooverreliance on volatile Southern African
Customs Union (SACU) revenues, whichtranslates into significant fluctuations inpublic spending and pose a challenge tothe management of fiscal operations andgrowth potential. Volatile SACU receipts
have been met by rigid government expenditure, leading to persistent fiscal deficits
in the recent past (Figure 1). SACU revenues consist of external trade and excise
duties on imported goods, as well as a development component derived from excise
taxes. The volatility in SACU revenues
largely reflects the volatility in imports
and the impact of exchange rate on custom
receipts. The fall in SACU revenue wasamplified by declining trade and growthduring the COVID-19 pandemic.
Poverty, unemployment, inequality, andHIV prevalence levels have historically
been high. Progress toward reducing

poverty has been slow, with close toa third of the population living below
the US$1.90/day (2011 PPP) international
poverty line. At about 27 percent, Eswatini has the world’s highest HIV prevalence rate among adults aged 15 to 49, adriver and consequence of high poverty
and inequality.

Recent developments
Despite the continued COVID-19 pandemic and the June 2021 political unrest, economic growth is estimated to have rebounded to 3.1 percent in 2021 from a contraction of 1.9 in 2020. The third and fourth
COVID-19 wave containment measures
were not as restrictive as those of earlier
waves, allowing firms to ramp up production in 2021Q4. A recovery in external demand supported export-oriented manufacturing activities. The vaccination campaign, which reached about 25.3 percentof the population at end December 2021,
helped to contain the spread of the virus
and eased uncertainties on both demandand supply prospects. Though the June-July political unrest resulted in the destruction of physical assets, theft of inventory,
and constrained operational hours, its impact on production was partly mitigated as
firms accessed a Reconstruction Fund set
up by the government to cushion businessfrom damages of the political unrest.
Inflationary pressures weakened in 2021 as
the government kept the rental price constant, resulting in annual inflation slowing
to 3.7 percent, from 3.9 percent in 2020.

FIGURE 1 Eswatini / Fiscal deficit and SACU revenue

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

Percent of GDP
25

Poverty rate (%)
90

40000

20

80

35000

15

70

30000

Real GDP per capita (constant LCU)

60

10

25000

50

5

20000

40

15000

0

30

-5

20

10000

10

5000

-10

0

-15
2000

2003

2006

2009

Fiscal Deficit

2012

2015

2018

0
2009

2021p 2024p

SACU

Sources: Eswatini Ministry of Finance, and the World Bank staff projections.

2011

2013

2015

2017

32

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2019

Year-on-year inflation started to increase in
December 2021 (to 3.5 percent from 3 percent in November 2021) after declining forthree consecutive months from September
2021. Inflation increased further in January2022 to 3.6 percent, prompting the Central
Bank to increase the repo rate (for the firsttime since July 2020) in January 2022, from3.75 percent to 4.0 percent.
The fiscal deficit is estimated to have declined in FY2021/22 mainly due to underspending on capital expenditure. The fiscal
deficit is estimated at 5 percent of GDP,lower than the 6.5 percent of GDP initiallyprojected in the original budget. The underspending on capital expenditure reflects low disbursements due to delays in
the procurement process on foreign financed projects. It also reflects commitment to the fiscal adjustment plan thataims to limit the accumulation of expenditure arrears. At the same time, revenue
collections declined mainly due to the pandemic and subsequent economic challenges. The current account surplus declined to 0.9 percent of GDP in 2021 from

6.5 percent in 2020 due to the decline in
SACU revenues.
Poverty remains stagnant, in a context
with limited growth in per capita GDP.
About 28.5 percent of the population is estimated to live below the poverty line($1.90/day).

OutlookReal GDP growth is projected to slow to 2
percent in 2022, reflecting the implementation of the government’s three-year fiscal
adjustment program that will dampen
growth of sectors linked to government
operations, such as construction and public administration. In addition, inflation is
expected to rise to 4.7 percent in 2022, driven by higher international oil (partly triggered by the Russia-Ukraine conflict), administered utility prices, and continued
supply shocks due to the COVID-19 pandemic. Nevertheless, the continuation of
the vaccination program (at 28.6 percent

TABLE 2 Eswatini / Macro poverty outlook indicators

as at mid- February 2022) is expected tostrengthen certainty on demand and supply chains. Poverty is projected to remain
at around 28 percent, reflecting the slow
economic recovery in the medium term.
The fiscal deficit is projected to further
decline in 2022, as authorities implement
the revenue and expenditure-led fiscal
adjustment plan. Although the secondround effects of the pandemic are anticipated to manifest through a further reduction in SACU revenues in 2022, thefiscal deficit is projected to fall, as domestic revenues recover, and the authorities continue to maintain a tight expenditure framework. Public debt is projected
to reach a peak in 2022 of 46 percent of
GDP and will start to decline from 2023,
reflecting declining fiscal deficit.
The current account balance is projected toturn into a deficit of 1.2 percent of GDP in
2022—the first time since the 2010/11 fiscal
crisis—partly reflecting declining SACU
revenues. The current account surplus isprojected from 2023 onward on the back ofrecovering SACU revenue.

(annual percent change unless indicated otherwise)
2019
2.6
-1.5
-2.0
1.0
16.3
1.5
2.7
0.9
5.5
1.1
2.6
4.7
-2.4
-6.2
40.0
-4.9
27.5
51.1
70.9
0.5
45.7

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.9
0.5
6.7
-5.9
-2.4
-0.7
-1.7
-5.4
-9.7
4.5
3.9
6.5
-0.2
-6.7
41.7
-4.5
28.6
52.0
71.8
0.2
45.9

2021e
3.1
2.7
2.2
3.8
2.7
2.1
3.1
3.3
7.8
0.2
3.7
0.7
-0.7
-5.1
42.8
-3.3
27.9
51.4
71.1
-0.5
46.0

2022f
2.0
2.2
-0.5
2.1
3.6
2.5
2.0
3.5
1.5
2.1
4.7
-1.2
-0.8
-4.4
45.7
-1.4
27.5
51.1
70.9
0.1
46.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2016-HIES.Actual data: 2016. Nowcast: 2017-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

33

Apr 22

2023f
1.8
2.4
-1.0
-0.8
3.9
2.3
1.8
4.5
1.6
1.4
4.3
0.4
-0.8
0.7
44.7
3.4
27.2
50.7
70.9
0.2
46.2

2024f
1.8
1.4
-0.5
1.5
4.3
2.3
1.9
3.6
2.0
1.5
4.4
1.1
-0.8
2.1
42.2
4.5
26.9
50.7
70.5
0.3
46.3

ETHIOPIA

Key conditions andchallenges

Table 1

2021

Population, million

117.9

GDP, current US$ billion

114.6

GDP per capita, current US$

972.5

International poverty rate ($1.9)

a

30.8
a

68.9

a

90.2

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

35.0

School enrollment, primary (% gross)

b

119.4

b

66.6

Total GHG Emissions (mtCO2e)

213.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

An increased import bill and a decline
in official aid flows have led to a weakening of the balance of payments and asignificant drawdown in reserves.
Growth in FY22 is expected to easefrom 6.3 percent in FY21, impacted by
the armed conflict, and inflation is likely
to remain high, as oil and wheat prices
increase. This is expected to result in a
slowdown in poverty reduction.

Ethiopia has been among the fastest
growing countries in the world, with
GDP expanding at an average rate of 10
percent during FY04-FY20. Growth has
been driven by large-scale public investment in infrastructure. While poverty declined by about 10 percentage points during 2004-2016, gains are modest whencompared to other countries that saw fast
growth, and inequality has increased inrecent years.
The limitations of the state-led development model in Ethiopia have become apparent in recent years. Structural transformation remains incipient, and the roleof the private sector is constrained by
SOE dominance and an uneven playing
field. The financing of the large capital
investments coupled with a loss in competitiveness, caused by an overvalued exchange rate, have put the country athigh risk of debt distress. Acknowledging
these shortcomings, the authorities
launched a Homegrown Economic Reform Agenda in September 2019, aiming
to foster efficiency and introduce competition in key growth-enabling sectors(energy, logistics, and telecom), improvethe business climate, and address macroeconomic imbalances. Among other measures, authorities are expected to adopt
a market-determined exchange rate andintroduce a modern monetary policy
framework by end-2022.

FIGURE 1 Ethiopia / Gross foreign exchange reserves

At 6.3 percent according to official figures,growth surprised on the upside in FY21,
as agriculture performance in the second
part of the year was better-than-expected.
The few available high-frequency indicators suggest growth has been sluggish in
the second half of 2021, as electricity generation dropped, capital imports contracted, and regional authorities in Amhara reported that 41 million quintals of agriculture production (or about 10 percent of the
production of the previous year) had been
lost due to the conflict.
Merchandise exports grew at 21.8 percent
year-on-year (y-o-y) during July-November 2021. While gold exports have declined after the surge in FY20, exportsof coffee, meat, and vegetables have beenstrong in both volumes and values, andtextile and flower exports have rebounded. Merchandise imports have expanded

Percent change
45

4,000

40

2.5
3,500

35

3,000

2.0

30

2,500

25

1.5
2,000

20

1,500

1.0

15

1,000

10

0.5
500
0
Jul-16

Recent developments

FIGURE 2 Ethiopia / Evolution of inflation, y-o-y percentagechangeMonths of imports
3.0

Million US$
4,500

Downside risks loom large over the outlook presented below. While has been asignificant de-escalation in the armed confrontation between federal and allied regional forces and Tigrayan forces since December and both sides seem to be more
open to seek a solution through diplomacy, the risks associated to a protracted conflict remain significant. Impacts on agriculture are also being compounded by the ongoing drought affecting the Horn of Africa.
Finally, there are risks that macroeconomic
stability is affected and economic reforms
are delayed or reversed.

5
0.0
Jul-17
Jul-18In million US$

0
Jul-16

Jul-19Jul-20Jul-21
In months of imports

Jul-17
General

Source: National Bank of Ethiopia.

Jul-18

Jul-19Food

Source: Central Statistical Agency of Ethiopia.

MPO

34

Apr 22

Jul-20Jul-21

Nonfoodfast (24.3 percent y-o-y), driven by a larger fuel and cereal bill as international
prices climb up. This has resulted in a significant widening of the current accountdeficit. During the first five months of FY22,
a significant drawdown of reserves wasneeded, as official transfers halved (-47.8
percent y-o-y), and despite robust FDI inflows (26.9 percent y-o-y). Reserves stood in
November at US$1.8 billion (about one
month of imports).
Inflation has averaged above 30 percent during the first seven months of FY22, driven by
food prices, a recent increase in fuel prices,and expectations. Despite continued nominal depreciation, high inflation has resulted
in the real exchange rate remaining broadly
unchanged during this period. After some
slowdown over the summer, base money
growth has picked up again, reaching 33.4
percentduringthefirstfivemonths ofthefiscal year. Broad money growth eased to 24
percent, impacted by the temporary instruction to freeze bank loan disbursements,
which was lifted in December.
Revenue collection remains sluggish,
growing at an estimate of 15 percent, innominal terms, during the first half of
FY22. In January, the parliament approveda supplementary budget comprising additional outlays on defense and reconstruction amounting to about US$2.5 billion (2.3
percent of GDP).
About 30 percent of households continue
reporting inability to purchase essential
items (food, medicines), and in the April
2021 round of the high-frequency survey
there was a surge in the number of households mentioning high prices were theirmain impediment. The ongoing armed
conflict has had a severe impact on food security: the World Food Program (WFP) estimated that as of November 2021, 9.4 million people needed humanitarian food assistance in northern Ethiopia.

Outlook
The growth figure for FY22 has been revised down on account of the intensification of the conflict during the firstmonths of the fiscal year, the introductionof more stringent foreign exchange surrendering requirements, and the new requirement for banks to invest 1 percent
of outstanding credit on Development

TABLE 2 Ethiopia / 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
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Bank of Ethiopia bonds, which will likely
hold back economic activity. Prices are
expected to keep rising the coming
months, as monetary policy has loosened
again, crop production has likely been
impacted by the conflict, and international commodity prices remain high. The
economic consequences of the Russian invasion of Ukraine, war and associatedsanctions are expected to result in further
deterioration of the balance of payments
and inflationary pressures. This outlook
expects some rebound in economic activity in FY23 assuming the conflict inTigray does not reignite.
The poverty trajectory is uncertain due tooffsetting factors. On one hand, armed
conflict, persistent droughts in lowland regions and rising inflation, are expected tohave driven a large number of people intopoverty. On the other hand, growth in other sectors and parts of the country is expected to alleviate poverty. Whether thepoverty effect of growth can fully offset the
impact of the conflict, droughts and inflation is unclear, but their intensity suggeststhat progress in poverty reduction will belower than in previous periods.

(annual percent change unless indicated otherwise)
2018/19
9.0
5.1
7.2
15.1
3.0
5.4
9.0
3.8
11.5
12.0
12.5
-5.1
-2.5
57.3
-2.0
25.9
63.7
83.4
2.0
24.6

2019/20
6.1
5.0
0.6
5.6
3.4
-1.9
6.1
4.3
9.6
5.2
19.9
-4.1
-2.8
56.5
-2.4
25.2
63.0
82.4
1.1
23.2

2020/21 2021/22e 2022/23f 2023/24f
6.3
3.3
5.2
5.9
3.0
2.5
2.8
3.3
12.2
21.1
3.8
3.1
7.6
-1.0
8.3
9.8
5.5
6.2
6.8
7.5
2.0
3.8
4.2
5.1
6.3
3.3
5.2
5.9
5.5
2.5
4.0
4.0
7.3
5.5
9.5
9.5
6.3
2.4
3.0
4.7
20.2
34.2
25.6
16.9
-2.7
-4.5
-4.1
-3.8
-2.8
-4.2
-3.3
-2.9
56.6
56.0
55.6
53.2
-2.2
-3.6
-2.7
-2.3
24.5
24.4
23.9
23.3
62.2
62.0
61.5
60.8
81.4
81.2
80.5
79.5
1.2
0.6
1.2
1.5
21.7
19.9
18.4
17.0

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2015-HICES, 2018-, and 2015-HICES. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
b/ Projection using point to point elasticity at regional level with pass-through = 1 based on GDP per capita in constant LCU.
Note: Growth projections are based on limited information and stand to be updated/revised based on improved data availability.

MPO

35

Apr 22GABONKey conditions andchallenges

Table 1

2021

Population, million

2.3

GDP, current US$ billion

17.6

GDP per capita, current US$

7734.3

International poverty rate ($1.9)

a

3.4
a

11.2

a

32.2

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

38.0

School enrollment, primary (% gross)

b

139.9

b

66.5

Total GHG Emissions (mtCO2e)

13.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2011 PPPs.
b/ WDI for School enrollment (2011); Life expectancy(2019).

Gabon’s economy expanded by an estimated 1.5 percent in 2021, driven by thebooming mining and forestry sectors. The
fiscal balance deteriorated slightly in
2021. Public debt remains sustainable,
but risks are high. The spike in agricultural commodity prices due to the
Ukraine conflict could add to food insecurity and disproportionally affect the mostvulnerable. While higher oil prices will
support the recovery, the transformationof Gabon’s growth model to foster green
and inclusive growth and accelerate job
creation is crucial.

Gabon’s economic recovery is underway,
although inadequate governance and apoor business climate remain major challenges to channel resource wealth to sustainable development and ensure broadbased improvements in living conditions.
Given the country’s young workforce andfast-growing population, increasing human capital is a priority to meet the challenge of economic diversification and reduce the risk of social unrest in a context
of high unemployment. Higher global oil
prices expected for the forecast horizon
might delay the implementation of measures to diversify exports, strengthen social safety nets, and promote competition.
Sustained implementation of reforms tostrengthen public financial management
and the efficiency of public investment
is crucial to meet the country’s development needs and improve its growthprospects. Efforts to improve reportingand procurement practices are required
to modernize and strengthen public investment management.
Despite the challenging global economic
context, it is crucial for Gabon to accelerate
its efforts to manage the macroeconomic
volatility due to external shocks. Key to his
is building fiscal buffers, by strengthening
domestic revenue mobilization and ensuring a more selective allocation of tax exemptions. Efforts to foster transparency innatural resource management need to be

stepped up to reduce fiscal vulnerabilities.
The reintegration of Gabon into the Extractive Industries Transparency Initiative in
October 2021 was an important step, andthe authorities need to ensure the effective
implementation of all membership obligations. Despite reaching historic highs in
2020, public debt remains sustainable, although vulnerabilities are high.

Recent developments
Following a recession in 2020 caused by
the COVID-19 pandemic and oil priceshocks, the Gabonese economy expandedby an estimated 1.5 percent in 2021.
Growth was driven by the non-oil sector,
in particular the booming mining andforestry sectors. Oil production is estimated to have declined by 5.5 percent
in 2021, year-on-year (y-o-y), to meet the
OPEC+ quota.
New measures to encourage vaccination
have been in place since the beginning of2022, but the number of fully vaccinatedpeople remains low at 13 percent of the
population in early March 2022. The
poverty rate is estimated to reach 34.1 percent in 2021. Living conditions have notyet returned to their pre-COVID-19 crisis
levels, when employment levels sufferedfrom restrictive measures, resulting in major income losses, especially for self-employed and informal workers.
Despite higher global food and energy
prices, inflation remained contained in
2021. The consumer price index increased by 2.0 percent in January 2022,

FIGURE 1 Gabon / Debt and fiscal balance

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

External and domestic debt (in CFAF billion)
8,000

Poverty rate (%)

Fiscal balance (in percent)
8

7,000

6

6,000

4

5,000

2

4,000

Real GDP per capita (millions constant LCU)

60

3

50

3

40

3

30

3

20

3

10

2

0

3,000

-2

2,000
1,000

-4

0

-6

0

2010 2012 2014 2016 2018
External debt
Domestic debt

2020

2022f 2024f
Fiscal balance (rhs)

Sources: Official government data and World Bank calculations. Note: e = estimate, f = forecast.
MPO

22005 2007 2009 2011 2013 2015 2017 2019 2021 2023
International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

36

Apr 22y-o-y, as food prices rose moderatelyby 2.4 percent. The Bank of Central
African States tightened its monetary
policy in late 2021 over concerns about
the evolution of foreign exchange reserves, which, despite higher oil prices
and the 2021 Special Drawing Rights
allocation, represented just above 3
months’ worth of imports of goods andservices by end-December 2021.
The fiscal balance deteriorated slightly toan estimated 2.5 percent of GDP in 2021.
High oil prices partially compensated forlower oil production and contributed tohigher than initially anticipated oil revenue while tax revenues remained fragile.
The government continued its efforts tokeep spending under control while investment spending increased. Public debt is estimated to have declined to 70.5 percent of
GDP at end-2021.
In 2021, the strong performance of thewood and manganese industries, combined with higher commodity prices, contributed to an overall increase in export
earnings, while imports rose slightly compared to the previous year. The current account deficit is estimated to have narrowed
to 4.9 percent of GDP in 2021.

OutlookGabon’s economy is projected to gain momentum and grow by an average of 2.8
percent in 2023-24. Higher global oil
prices due to the conflict in Ukraine are
expected to have spillover effects on internal demand. Medium-term growth
critically depends on the government’s
commitment to structural reforms andeconomic diversification.
Measures to strengthen domestic revenue
collection and rationalize tax exemptions
would contribute to higher tax revenues,
and oil-revenue would be favorably impacted by higher global oil prices. Theremay be pressure on the wage bill in 2022
as the public servants’ hiring freeze is discontinued. Fiscal balances and debt are expected to improve gradually over the
medium term. Concrete efforts to improve
public debt management and budget execution should prevent the accumulation of
new domestic and external arrears.
The current account is projected to posta surplus in the medium term, supported
by higher oil and manganese prices, theTABLE 2 Gabon / Macro poverty outlook indicators

continued easing of OPEC+ oil production
cuts, and a resumption of investments inwood and agri-business.
Against this backdrop, the share ofGabonese households living on less than
US$5.5 per day is expected to decline gradually to 33.4 percent by 2024, which is 1.0
percentage point higher than the pre-pandemic rate estimated for 2019.
The outlook is subject to high levels of uncertainty. Gabon’s fiscal sustainability
could deteriorate if global financing conditions tighten substantially. While higherthan-expected global oil prices will favorably impact the country’s fiscal and external balances, high global food and energy
prices due to the Ukraine conflict pose inflation risks and will disproportionally affect Gabon’s most vulnerable populationand increase food insecurity. The emergence of new COVID-19 variants may also
have a negative impact on domestic activity if the government were to impose new
restrictions. Uncertainty surrounding the2023 presidential election and weak institutional capacity could slow the government’s implementation of structural reforms aimed at diversifying away from oil,thereby jeopardizing future growth.

(annual percent change unless indicated otherwise)
2019
3.9
0.9
6.1
21.5
14.0
21.5
4.2
7.9
6.8
2.3
1.0
-0.9
-7.4
1.4
59.8
3.6
3.4
11.3
32.3
-1.3
17.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.8
-2.0
5.5
-16.7
10.1
-16.7
-1.9
5.9
-2.2
-2.8
1.6
-6.0
-8.4
-2.1
77.4
1.2
3.6
12.0
33.8
-2.4
14.7

2021
1.5
-1.0
1.3
10.8
0.6
34.8
1.5
6.7
0.4
1.3
2.0
-4.9
-7.5
-2.5
70.5
0.4
3.6
12.1
34.0
-2.1
12.1

2022e
3.3
0.1
0.5
-0.2
6.4
0.1
3.3
5.2
3.0
3.1
3.0
4.1
-4.9
0.5
61.6
3.2
3.6
12.0
33.8
-1.7
9.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2017-EGEP.Actual data: 2017. Nowcast: 2018-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2017) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

37

Apr 22

2023f
2.6
3.3
1.5
3.2
1.8
2.7
2.6
4.2
1.5
2.9
2.8
3.1
-5.0
2.4
60.0
5.0
3.6
11.9
33.7
-1.4
7.4

2024f
3.0
2.6
0.1
5.0
0.9
2.3
3.0
4.8
2.9
2.7
2.5
1.2
-4.0
1.8
59.0
4.5
3.5
11.9
33.4
-1.2
5.3

THE GAMBIA
Table 1

Key conditions andchallenges
2021

Population, million

2.5GDP, current US$ billion

2.0

GDP per capita, current US$

821.4

International poverty rate ($1.9)

a

10.3
a

38.4

a

72.7

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

35.9

School enrollment, primary (% gross)

b

103.5

b

62.0

Total GHG Emissions (mtCO2e)

3.6Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Economic recovery accelerated towards
end-2021. However, the pace of recovery
will slowdown owing to commodity
prices and supply shocks. High fiscal
deficits have led to domestic borrowingthat could risk sustainability. Inflation
may erode household incomes amidst aslow recovery in employment and hinder
poverty reduction. The outlook is subject
to downside risks from the speed of global
recovery, the pandemic, and global contagion from the Russia-Ukraine conflict.

Semi-enclaved within Senegal, The Gambia is a small, fragile, densely populated
country with historically low and volatileeconomic growth, characterized by limited
economic diversification, insufficient capital accumulation, and low productivity.
Since the democratic transition of 2017, theGovernment has taken steps to restore
macroeconomic stability and reignite
growth (6 percent during 2017-2019). The
2019 debt restructuring helped The Gambia
to exit debt distress in early 2020 and paved
the way for an IMF program. A successful
2021 election will further these gains.
Despite progress with COVID19 vaccination in tourist markets, it is slow within
The Gambia at 13.5 percent, and the recovery will be gradual due to uncertainty
around new variants and the RussiaUkraine conflict. The 2021/22 tourist season (October to March) performed above
expectations in 2021, however future travel
restrictions, a potential downturn intourist markets, and the rising cost of living globally could slow the recovery. GDP
growth estimates for 2021 were revised upcompared to the Fall, reflecting higherthan-projected tourist arrivals, remittances, FDI, project implementation and a
private credit rebound. However, continued commodity price and supply shocks
will constrain future agricultural growth.
Recovery in the labor market remains slow
and unequal as increases in employment

occurred mostly in the low-productive
agriculture sector (employing 35.5 percent
of workers), and not in the higher-paid services sector, slowing the pace of poverty
reduction. Moreover, high food inflation
exposes poor households – who spend 65
percent on food - to the risk of sliding
deeper into poverty.
As the risk of debt distress and inflation remain high, The Gambia has limited fiscal
and monetary policy buffers to respond to
the spillovers from war. The outlook is
subject to downside risks from vaccine-resistant virus mutations, slower vaccineroll-out, higher commodity prices, slower
reform pace, and frequent climatic shocks.

Recent developments
GDP grew by 5.6 percent (2.6 percent inper capita terms) in 2021, after fallingby 0.2 percent in 2020 (-3 percent pc).
All sectors grew, as tourist arrivals wereabove-expectations, rainfall was higher
than average (supporting poor, rural andindustrial workers) and record-high remittances continued to support the construction and distributive trade sectors.
On the demand side, growth was supported by private consumption and investment while imports grew.
The current account deficit (CAD)widened slightly in 2021 despite a reboundin tourism. FDI financed the deficit, while
the exchange rate remained stable. Remittances increased by 31 percent y/y bolstering reserves to above 6 months of next
year’s imports at end-2021. Remittances

FIGURE 1 The Gambia / Actual and projected fiscal andprimary balance

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

Percent of GDP
2

Poverty rate (%)

Percent of GDP
90

1

85

0
-1

80

-2

75

-3
70

-4
-5

65
2019

2020

2021 eFiscal balance (% of GDP)
Debt (% of GDP, rhs)2022 f

2023 fReal GDP per capita (constant LCU)

90

30000

80

29000

70

28000

60

27000

50

26000

40

25000

30

24000

20

23000

10

22000

0

2024 f

21000
2010

Primary balance (% of GDP)

Sources: Gambian authorities and World Bank estimates.

2012

2014

2016

2018

38

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

MPO

2020

were the same for almost half of the bottom 20 percent households responding tohigh-frequency phone surveys.
The fiscal deficit doubled as capital expenditure accelerated, mainly for locally-funded infrastructure projects, and tax revenues and grants declined. Recurrent
spending fell as pandemic-related support
was withdrawn. While public debt-to-GDP
declined, short-term domestic borrowing
increased significantly, elevating risks to
debt sustainability.
Headline inflation rose, driven by highfood prices (+3 percentage points). A negative output gap implies inflation is mostly
imported. The central bank has thus sustained the 10 percent policy rate since May
2020. Broad money continued to grow in
2021, supported by the banking sector’shigh level of net foreign assets.
Poverty increased in 2020 – for the firsttime since 2016 - driven largely by
COVID-19. Survey data indicate large
employment losses and near universal income losses at the peak of the pandemic. However, the extreme poverty rate declined from 9.2 percent in 2020 to 8.5 percent in 2021, lifting over 10,000 people
out of poverty, driven by the recovering
agriculture labor market. Additionally,

ongoing cash transfers in rural areas,
where most of the poor live, is likely tohave contributed to the decline in poverty.

Outlook
The conflict in Ukraine will slow therecovery as the terms-of-trade worsen,
The Gambia being a net oil, fertilizer,
and food importer. It has, however,weak direct investment, tourism andtrade links with Russia or Ukraine.
Private and public consumption wouldgrow in 2022 to counter the shock, whilelarge infrastructure projects are implemented. Over the medium-term, growth
will be driven by services, industry andagriculture, and the pandemic-induced
adoption of digital technologies, assuming
implementation of structural reforms andnormal weather. Real GDP will grow by
5.6 percent in 2022 (2.7 percent in pc) and
6.2 percent in 2023 (3.2 percent in pc).
The CAD will widen further, driven bycommodity imports and the high importcontent of public investments, and by declining grants and private inflows overtime. The deficit will be financed by FDI

TABLE 2 The Gambia / Macro poverty outlook indicatorsand capital transfers. Reserves should remain above 4 months of imports.
The fiscal deficit will increase further in
2022 as subsidies/transfers increase topartially offset rising fuel, fertilizer andfood prices. Starting 2023, fiscal consolidation will resume, supported by improved tax expenditure monitoring andrevenue administration, and public finance reforms. The primary deficit is projected to reach 0.8 percent of GDP by
2024, with public debt-to-GDP remaining
high but on a declining path.
Inflation is expected to continue risingfrom high commodity prices and structural challenges at Banjul Port. Rising foodprices will limit the ability of vulnerable
households to increase their real incomes.
Surveys show that as of December 2021, 78
percent of households reported food prices
as the main shock affecting their wellbeing.
The economic recovery is expected to offset the negative distributional effects of inflation, so the poverty rate is expected tocontinue declining, reaching 7.8 percent in
2022 and 6.2 percent by 2024. The planned
expansion in cash transfers to urban areas
will provide some cushion against price increases and support poverty reduction.

(annual percent change unless indicated otherwise)
2019
6.2
4.0
14.6
28.7
-10.6
-1.7
6.2
-0.5
14.8
6.1
7.1
-6.2
-2.5
83.0
0.6
8.4
33.2
69.2
2.5
30.4

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-0.2
-2.4
10.8
40.7
-51.3
16.2
-0.2
12.0
9.9
-7.3
5.9
-3.7
-2.2
85.0
1.0
9.2
35.5
70.7
2.1
30.3

2021e
5.6
4.3
-2.8
21.0
6.2
7.9
5.6
1.0
10.7
5.6
7.4
-4.6
-4.4
83.0
-2.0
8.5
33.6
69.3
3.4
30.1

2022f
5.6
7.0
2.6
7.1
15.5
11.2
5.6
2.0
4.9
7.2
8.0
-12.3
-4.6
80.4
-1.9
7.8
32.3
67.6
2.7
30.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2015-IHS. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2015) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

39

Apr 22

2023f
6.2
6.0
6.1
6.5
11.0
7.2
6.2
2.8
6.8
7.2
8.0
-12.7
-3.6
74.5
-1.0
7.0
30.7
65.3
2.9
30.2

2024f
6.5
4.7
7.4
4.2
7.6
1.8
6.5
3.2
7.0
7.4
6.3
-10.9
-3.4
68.7
-0.8
6.2
28.8
63.7
2.5
30.3

GHANAKey conditions andchallenges

Table 1

2021

Population, million

31.7

GDP, current US$ billion

73.0

GDP per capita, current US$

2299.2

International poverty rate ($1.9)

a

12.7
a

29.3

a

55.1

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

43.5

School enrollment, primary (% gross)

b

103.4

b

64.1

Total GHG Emissions (mtCO2e)

18.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Economic growth rebounded to 4.1 percent in 2021, but significant macroeconomic imbalances remain. The fiscal
deficit and debt remained elevated, andinflation rose to double digits. Mediumterm growth prospects are strong, butthere are important risks related to fiscal
and external vulnerabilities. Poverty reduction has stagnated in recent years asimportant regional disparities persist; therecent surge in food and fuel prices islikely to have a significant impact on thepoor and vulnerable households.

Ghana has experienced strong economic
growth over the past three decades, leading to a near doubling of GDP per capita.
However, in the past decade, GDP growthfluctuated between 2.7 and 6.5 percent (except 0.4 percent in 2020 as a result of thepandemic), partially due to dependence onnatural resources and exposure to external
shocks. Moreover, Ghana’s growth has notcreated sufficient job opportunities for thegrowing and young population, and theeconomy is not sufficiently diversified:gold, cocoa, and oil exports accounted forover 75 percent of all goods exports over
2015–2017, with limited manufacturing exports. Labor has continued to move outof agriculture and into low value-added
services, and some manufacturing whilesome services subsectors have experienced
fast growth (ICT, Financial and Professional Services) but they employ very few
workers. Macroeconomic management has
been uneven. Recently, relatively large fiscal imbalances and elevated public debt
have put Ghana at high risks of debt distress. Ghana’s sovereign spreads widenedin the second half of 2021 effectively shutting the economy off from the Eurobond
market and risking further strain on external sustainability.
Ghana’s economy continues to suffer impacts of the pandemic, and the war in
Ukraine and associated sanctions are further complicating the outlook, exacerbating

prior inflationary pressures and financing
constraints. The developments are expected
to raise global prices for several key commodities (including food, fuels, fertilizers,
and metals used in manufacturing), lowering households’ and firms’ purchasing
power and increasing poverty; these pressures have already hastened monetary policy tightening. Higher fertilizer and metal
prices are expected to negatively impact
construction, manufacturing, and agriculture. Although Ghana will enjoy a current
account boost from rising commodity
prices (particularly for oil and gold), benefits to real GDP are likely to be counteracted
by domestic inflation and Ghana’s falling
oil production until at least 2025.

Recent developments
Ghana’s economy rebounded in 2021, after
the COVID-induced slowdown in 2020.
Growth is estimated at 4.1 percent for 2021
– below pre-pandemic trends. Inflation averaged 10 percent in 2021, and accelerated
further in early 2022, driven by exchange
rate depreciation and food and non-foodprice hikes. Inflation reached 15.7 percent
in February, its highest rate since 2016 andwell above the Central Bank’s target bandof 6 – 10 percent.
The fiscal deficit was 11.3 percent of GDP in
2021, reflecting significant budget rigidities,
debt service obligations, and revenue mobilization challenges. The deficit had doubled
from 7.6 percent of GDP in 2019 to 15.2 percent in 2020, due to pandemic-related
spending and financial and energy sector

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

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

Percentage points
40

Poverty rate (%)

Percent
7

20
0

7000

6

70

6000

5

60

4

50

3

40

2

30

-20
-40
-60

1

-80

0
2019

2020

Private cons.
Exports
Inventories

2021e

2022f

Gov. cons.
Imports
GDP

2023f

Real GDP per capita (constant LCU)

80

5000
4000
3000
2000

20

1000

10

2024f

0

0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

GFCF
Statistical disc.

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

40

Apr 22

cleanups. Debt-to-GDP rose by 15.6 percentage points to 78.8 percent of GDP in
2020. New debt has been increasingly contracted from the domestic sector, at higher(nominal) rates and shorter maturities.
The 2021 Balance of Payments surplus
is estimated at 2.1 percent of GDP. The
trade balance was positive but narrowed
as imports recovered more quickly thanexports. The Current Account Deficit was
3.8 percent of GDP in 2021, reflecting
high investment income outflows, including debt servicing. The Capital and Financial Accounts enjoyed a US$3.7 billion
surplus by 2021Q3 and foreign reserves
were US$11.0 billion (4.9 months' importcoverage) by September 2021, up from
US$8.6 billion in December 2020. The exchange rate was relatively stable in 2021
(supported by US$4 billion in Eurobond
issuances and Special Drawing Rights allocations) but fell substantially in late
2021 and early 2022 (17 percent against
the dollar from end December 2021 toMarch 2022).
Poverty reduction has slowed in recent
years, with persistent spatial inequalities
and increasing vulnerabilities. More than
20 percent live under the national poverty
line. The poor are concentrated in the threenorthern regions, where poverty rates areabove 50 percent. Using the international
poverty line (US$1.9 PPP), poverty declined from 12.7 percent to 10.2 percent
from 2016 to 2021, reflecting slow but
steady real GDP per capita growth.

Outlook
Growth is projected to reach 5.5 in 2022
and an average of 5.3 over 2022-2024.
Growth is expected to be broad-based, ledby agriculture and services and a stronger
industry sector supported by higher extractives prices. Higher fertilizer prices
due to the Ukraine crisis may slightly depress agricultural output in 2023.
The government’s 2022 budget set forth anambitious consolidation plan, which may
prove difficult to achieve. The government
aims to raise revenue from 16 percent of
GDP in 2021 to 20 percent in 2022, which,combined with spending cuts, would reduce the deficit to 4.5 percent of GDP by2024. However, a significant revenue measure (an e-levy ) has faced steep opposition, preventing its introduction so far,while targets for other revenue measures
are optimistic. More conservatively, the fiscal deficit may average 7.5 percent in the

TABLE 2 Ghana / Macro poverty outlook indicators

medium-term (2022-2024), compared to
the Authorities’ target of 5.8 percent.
Ghana’s external position is projected toworsen after a temporary improvement in
2021. The current account deficit is expected to widen to 4 percent of GDP in
2022 and to remain elevated through to2024, due to a gradual decline in oil export volumes and recovery of imports to
pre-pandemic levels. In the coming years,
there will be pressure to erode foreign reserves due to the widening current account deficit and constrained access to theEurobond market.
Using the international poverty line
(US$1.9 PPP), poverty rate is projected todecrease from 10.2 in 2021 to 8.8 in 2024.
with the uptick in growth. However, theongoing conflict between Russia andUkraine places increased pressure on
prices. Year-on-year food inflation had already nearly tripled between May 2021
and February 2022 to 17.4 percent. Given
that Ghanaians devote nearly half theirbudget to food, this will tighten the budgetof millions of Ghanaians vulnerable topoverty. Combined with other pressuresfrom the Russia–Ukraine conflict and associated sanctions, these risks imperiling thepoverty reduction achieved by Ghana during the 21st century.

(annual percent change unless indicated otherwise)
2019
6.5
13.9
5.4
-27.9
6.7
1.7
6.5
4.6
6.4
7.6
7.9
-2.7
-7.6
63.3
-1.9
10.2
25.0
49.1
16.1
148.7

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
0.4
1.3
6.4
-40.7
-12.8
-8.8
0.4
7.4
-3.6
0.9
10.4
-3.3
-15.2
78.8
-8.8
10.5
25.5
49.8
9.6
143.9

2021e
4.1
5.8
-15.9
5.9
7.6
4.9
4.1
5.4
-0.5
8.0
10.0
-3.8
-11.3
83.5
-3.7
10.2
24.9
49.0
-2.0
144.2

2022f
5.5
6.2
-2.6
12.4
5.2
4.2
5.5
5.0
5.7
5.6
12.8
-4.0
-10.6
84.9
-1.4
9.5
23.8
47.3
15.2
137.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2016-GLSS-VII. Actual data: 2016. Nowcast: 2017-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

41

Apr 22

2023f
5.2
6.0
-3.0
4.4
5.2
4.9
5.2
5.3
4.8
5.5
12.1
-4.2
-6.5
86.4
0.3
9.2
23.0
46.1
13.8
132.3

2024f
5.0
4.0
-1.2
7.7
5.2
2.3
5.0
4.3
4.2
6.2
11.0
-3.0
-5.5
87.4
1.1
8.8
22.3
44.7
8.2
129.3

GUINEA

Key conditions andchallenges

Table 1

2021

Population, million

13.5

GDP, current US$ billion

16.1

GDP per capita, current US$

1194.6

International poverty rate ($1.9)

a

23.2
a

60.4

a

89.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
National GINI (2018/2019)

27.2

School enrollment, primary (% gross)

b

100.8

b

61.6

Total GHG Emissions (mtCO2e)45.8Life expectancy at birth, years

COVID-19 affected the non-mining sector and exacerbated existing development challenges. Enacting structural reforms to diversify the economy and promote inclusive growth has become morepressing. Guinea is at moderate riskof external debt distress with limited
space to absorb shocks. This assessment
hinges on commitments to maintain aprudent borrowing plan that maximizes
concessional borrowing.

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

A slowdown in bauxite production and amodest recovery in services slowed
growth to 3.1 percent in 2021. The fiscal
deficit narrowed, reflecting lower capitalspending, but public debt increased to43.1 percent due to PPP infrastructure
projects. Mining-related FDI is expected
to support growth over the medium term,lowering poverty. Down-side risks include a prolonged political transition,
persisting COVID-19 impacts, delayed
structural reforms, and spillovers of the
Ukraine conflict.

Growth averaged 8 percent 2016-2020, 5.1
percent in per capita terms, supported bya mining boom and low fiscal deficits (1.3
percent in 2016–2020). However, economic growth had a limited impact on poverty reduction and shared prosperity, with
the national poverty rate declining from48.5 percent in 2014 to 43.7 percent in
2018/19, equivalent to a growth elasticity of poverty of 0.47. The pandemic most
likely erased those gains. About 32 percent of the population suffered deprivations in education, health, and access tobasic infrastructure in 2018.
Guinea shares many of the economic features of resource-dependent countries. Exports are dominated by few products (e.g.,bauxite and gold) and concentrated in few
markets (China and the United Arab Emirates), exposing the country to commodity
price shocks. The mining boom and highinflation have affected the competitivenessof other sectors through an appreciating
local currency— a phenomenon known as‘Dutch disease’. Guinea also has low levelsof human capital and widespread gender
gaps in education, earnings, agricultural
productivity, and political representation.
Governance challenges were brought tothe forefront by the coup d’état in September 2021. Other constraints to inclusive growth include weak tax revenues,
an underdeveloped financial sector, andlarge infrastructure gap.

FIGURE 1 Guinea / Primary and overall fiscal balance

Recent developments
Growth decelerated to 3.1 percent in 2021
(0.3 percent in per capita terms). Bauxite
exports (in tons) grew by 4 percent in 2021
compared to 24 percent in 2020 becauseof a slowdown in economic activity after
the coup. Gold exports (in ounces) grew
11 percent in 2021, reflecting a strong artisanal production. Inflation accelerated
from 10.6 percent in 2020, to 12.6 percent
in 2021 due to higher food prices (15.1 percent) and supply disruptions (domestic
and external). The Ukraine conflict will
likely increase food price inflation in 2022,
affecting disproportionally the poorest andthreating food security.
The overall fiscal deficit (including
grants) improved to 1.6 percent of GDP in
2021, even though tax revenues remainedlow (11.4 percent of GDP). Weak tax administration and mining tax exemptions
explain low tax revenues. Electricity subsidies doubled in 2021 to 20 percent ofspending, reflecting low electricity tariffs
and higher electricity generation from the

FIGURE 2 Guinea / Food security status of the population(January 2021)

Percent of population

Percent of GDP
0.0
-0.5

Urban

-1.0
-1.5

Rural

-2.0
-2.5

Guinea

-3.0

0

-3.5
2017

2018

2019

Fiscal balance

2020

2021e 2022p 2023p 2024p
Primary balance

Sources: Guinean authorities and World Bank staff projections.

20

40

60

80

Food Secure

Midly food insecure

Moderately food insecure

Severely food insecure100

Source: World Bank staff calculation based on HFPS 2021. Note: the household
high-frequency phone survey (HFPS) includes a module to capture the Food Insecurity Experience Scale (FIES) following the FAO (2017) methodology.
MPO

42

Apr 22

Kaleta-Souapiti hydropower project. Under-executed capital spending helped offset those subsidies. Spending on social
safety nets is small (0.5 percent of public
spending in 2020). The debt-to-GDP ratio
increased from 38.4 percent of GDP in 2018
to 43.3 percent in 2021, reflecting borrowing related to the pandemic and disbursement for the Souapiti hydropower project.
The current account deficit improved to 9.4
percent of GDP in 2021, due to lower imports of intermediate goods. Mining-related FDI continued to be the main source of
external financing and increased from 9.9
percent of GDP in 2020 to 10.8 percent in
2021. Estimated international reserves decline slightly in 2021 while the currency
appreciated in nominal terms.
Based on GDP per capita growth projections, the extreme poverty rate (percentage of the population living below the international poverty line US$1.90 per capita per day, 2011 PPP) is estimated tohave remained stagnant at 21.1 percent in2020 and 2021. However, when considering that the pandemic most likely pushed
into poverty nonpoor vulnerable populations close to the national poverty line
(estimated at 5,006,362 GNF per capita

per year in 2018/19), the national poverty
rate is estimated to have increased 4 percentage points, disproportionately affecting rural populations.

OutlookMining-related FDI will continue to drive
growth. As the service sector and mining
production recover, growth will accelerate
in 2022. But the Ukraine conflict lowered
growth projections to 4.4 percent in 2022,
and to 5.8 percent in 2023–2024 and could
affect the operations of Rusal, a Russian
conglomerate that accounts for 7 percent
of bauxite exports. Investment in energy
and transport could support growth in theconstruction sector. Better provisioning of
fertilizer stocks could improve agricultural
productivity, but higher fertilizer prices
could dampen earnings. Rising oil prices
could increase fuel subsidies, widening the
fiscal deficit. Uncertainties around the political transition could also decelerate theimplementation of reforms to strengthen
governance and the financial performanceof the public electricity utility, which could

TABLE 2 Guinea / Macro poverty outlook indicators

reduce private investment, and spending
in social programs. Inflation is expected toremain high, but to decline gradually to 8.8
percent by 2024.
The external current account deficit is projected to widen to 13.3 percent of GDP in
2022, reflecting lower exports, higher imports for infrastructure spending, and higher energy and food costs due to the RussiaUkraine war. The deficit is projected to stabilize thereafter, with exports projected to
grow slower than imports, particularly forrenewed infrastructure spending for roadand railways. FDI inflows could increase,reflecting planned new mining projects,
and support financing requirements.
Extreme poverty is projected to decline to19.0 percent by 2023. Downward risks topoverty reduction include the persistenceof high inflation and the deferral of social
reforms. Higher fertilizer prices due to the
Ukraine conflict could constraint farmers,
disrupting the food industry. Following
the COVID-19 crisis, 84 percent of Guinean
households cited higher input prices as themost common challenge in farming andthe prospects for a prolonged period offood insecurity is high.

(annual percent change unless indicated otherwise)
2019
5.6
5.4
-6.3
-8.4
-0.6
-9.5
6.5
7.6
7.2
5.5
9.5
-10.8
9.0
-0.5
33.8
0.0
21.8
58.7
89.2
3.0
14.7

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
4.6
3.5
42.9
-10.2
33.5
39.4
4.6
-1.6
18.5
-3.4
10.6
-14.0
10.1
-2.9
40.0
-2.3
21.1
57.9
88.7
3.7
14.6

2021e
3.1
5.5
-1.3
19.0
3.4
7.2
3.1
5.4
4.2
1.2
12.6
-9.4
10.8
-1.6
43.1
-0.7
21.1
57.8
88.6
4.0
14.4

2022f
4.3
4.1
11.8
18.4
3.8
10.2
4.4
5.8
5.0
3.3
12.0
-13.2
13.2
-2.2
42.6
-1.2
20.2
57.0
88.3
4.0
14.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

43

Apr 22

2023f
5.9
4.6
9.5
26.4
4.0
10.1
5.8
6.0
6.7
4.9
10.0
-13.4
13.2
-2.1
41.6
-1.0
19.0
55.4
87.6
4.0
14.0

2024f
5.8
4.7
9.4
22.8
4.0
10.1
5.8
6.0
6.7
4.9
8.8
-12.3
12.3
-1.9
42.2
-1.0
18.1
53.9
86.8
4.0
13.8

GUINEA-BISSAU
Table 1

2021

Population, million

2.0GDP, current US$ billion

1.6

GDP per capita, current US$

793.9

International poverty rate ($1.9)

a

24.7
a

59.5

a

86.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

34.8

School enrollment, primary (% gross)

b

118.7

b

58.3

Total GHG Emissions (mtCO2e)4.6Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2010); Life expectancy(2019).

Growth is expected to continue to recover
over the medium-term, as international
cashew demand and production rebound,rising to around 4.5 percent and bolsteredby fiscal consolidation and structural reforms. The outlook is subject to significant downside risks stemming from continued inflationary pressures, notably forfood and petroleum, potentially exacerbated by conflict in Ukraine, new
COVID-19 variants, external shocks affecting international cashew prices, political instability, and climatic shocks.

Key conditions andchallenges
Exports of raw cashew nuts, which account for 90 percent of merchandise exports, determine economic performance.
Cashew production is dispersed amongsmallholder farmers, whose income supports overall economic activity. Annual
GDP grew 5.4 percent on average between 2015 and 2017 (3.2 percent in percapita terms) as cashew prices reachedrecord highs, but Guinea-Bissau is structurally vulnerable to terms-of-trade
shocks and climatic risks. Raw cashew
prices had been on a downward trajectory since 2018, adversely affecting economic growth, poverty, and government
finances, until a recovery in 2021. Around
15 percent of tax revenue is directly related to cashew exports.
Limited diversification and low agricultural productivity keep the country highly dependent on food and capital imports. Responding to the COVID-19 pandemic and externally financed infrastructure projects led to high primary deficits
and considerable debt accumulation in
2021. Entrenched political instability hastaken the country through multiple
coups, including a failed attempt in February 2022, and precluded the implementation of structural reforms.
The banking sector is a looming risk. The
sector continues to depend on the accommodative stance of the central bank injecting liquidity into the economy, whichstarted as a response to COVID-19 andcontinued into 2021. A systemic bank isundercapitalized. High levels of non-performing loans, 21.8 percent in all banks
across the country and 10.3 percent excluding the undercapitalized bank, also represent an important vulnerability. A deterioration in this situation would generate contingent liabilities, adding to fiscal and public debt pressures.

Recent developments
Economic activity expanded to 3.8 percent
in 2021 (1.5 percent in per capita terms)
from 1.5 percent in 2020. Strong cashew
production, up 23.5 percent from 2020, andhigh international prices drove growth,causing an upward revision of growthforecasts. On the demand side, capital investments and net imports were the main
drivers of growth. Inflation rose from 1.5
percent in 2020 to 3.3 percent in 2021, driven by an increase in food (+2 percentage
points) and oil prices.
Increased cashew exports only partially
offset the increase in oil and food importprices and the current account deficit(CAD) is estimated to have increased from
2.9 percent of GDP in 2020 to 4 percent in
2021. The CAD was financed by concessional loans and grants. The IMF SDR allocation of USD $38.4 million (2.4 percent ofGDP) contributed to closing the external financing gap.
The fiscal deficit fell from 9.9 percent of
GDP in 2020 to 5.3 percent in 2021, driven by an increase in tax revenues and

FIGURE 1 Guinea-Bissau / Evolution of main economic
indicators

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

Percent, percentage points
8

Poverty rate (%)

6

90

4

80

2

70

0

60

-2

50

-4

40

-6

30

-8

20

-10

Real GDP per capita (constant LCU)

100

460000440000420000400000380000360000

10
2013

2015

2017
2019
2021e
GDP growth (%)
Fiscal balance (% of GDP)
Current account balance (% of GDP)

2023f

0

3400002010

Sources: Ministry of Finance and World Bank.

2012

2014

2016

2018

44

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2020

a reduction in current expenditure. Public debt as a share of GDP increased from78.3 percent in 2020 to 79.8 percent in
2021, driven by the depreciation of theeuro against the dollar and the rephasingof legacy arrears. Although the risk of external and total debt distress is high, public debt remains sustainable.
Guinea-Bissau’s monetary and exchange
rate policies are managed by the Central
Bank of West African States (BCEAO),
which maintains a fixed peg between the
CFA franc and the euro. Its reserves
reached 5.8 months of imports of goods
and services in 2021, because of increased
exports, the August 2021 SDR allocation,and portfolio inflows linked to Eurobond
issuances in the region (by Benin, Côte
d’Ivoire, Senegal and the BOAD).
Using updated poverty indicators from2018/19 (previous MPOs used 2010 indicators), extreme poverty ($1.9/day PPP
poverty line) declined from 24.1 percent
in 2020 to 23.4 percent in 2021, liftingover 3,000 people out of extreme poverty. The decline in poverty indicates aslow recovery in the economy. Additionally, recent political events are likely

to further dampen the pace of recovery
in sectors such as tourism, thereby affecting poverty reduction.

Outlook
The Ukrainian conflict will have a negative
effect on the economy. Real GDP growthhas been revised down from 4 percent in
2022, to 3.5 percent and medium-term
growth from 5 percent to 4.5 percent, despite high forecasted cashew prices and infrastructure investments. The crisis will also cause inflation to rise to 4 percent in
2022, reflecting higher food and oil prices.
The outlook is subject to substantial downside risks stemming from political instability, climate shocks, new COVID-19 variants, and non-performing loans in the financial sector.
The CAD will reach 5 percent of GDP in
2022 and 4.6 by 2024. External financing
needs will continue to be met by concessional loans and grants in 2022. WAEMU
reserves are expected to fall to around 5.5
months of imports in 2022 and 5.3 months

TABLE 2 Guinea-Bissau / Macro poverty outlook indicators

in 2023 and 2024, reflecting faster growth
in imports and a reduction in net capital
inflows (as a percent of GDP), as the environment for Eurobond issuances remains
uncertain. Growth-friendly fiscal consolidation and the implementation of structural reforms are key to maintaining reservesat an optimal level.
The authorities are committed to a medium-term fiscal consolidation, which includes enhanced management of fiscal
risks, notably from SOEs, revenue mobilization and control of the wage bill. The
primary deficit is projected to decline from
2.3 percent of GDP in 2022, to 1.8 by 2024with the public debt-to-GDP ratio expected to fall to 75 percent of GDP by 2024.
Sustained agricultural growth should continue to reduce poverty rates in 2022, to22.6 percent and reaching 20.5 percent by
2024, lifting an additional 22,000 people
out of poverty. Significant downside risks
exist, notably related to the pace of the economic recovery, political and security instability, and the poor, who spend nearly
60 percent of their expenditure on food, aremost vulnerable to rising food prices.

(annual percent change unless indicated otherwise)
2019
4.5
1.4
16.6
33.8
8.7
14.1
4.5
5.8
4.2
3.5
0.3
-8.8
-4.1
65.9
-2.9
23.6
58.2
85.4
1.0
12.8

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
1.5
-1.0
9.0
7.3
-2.5
-1.0
1.5
-0.2
-0.2
3.5
1.5
-2.9
-9.9
78.3
-8.3
24.1
58.7
85.8
1.2
12.9

2021e
3.8
3.0
-0.4
14.1
5.3
5.9
3.8
4.4
3.5
3.4
3.3
-4.0
-5.3
79.8
-3.7
23.4
57.9
85.1
0.4
13.0

2022f
3.5
1.0
16.2
7.2
5.5
6.0
3.5
4.6
3.6
2.6
4.0
-5.0
-4.2
80.9
-2.3
22.6
57.4
84.7
1.1
13.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.87 based on GDP per capita in constant LCU.

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2023f
4.5
2.5
3.2
16.2
6.0
6.4
4.5
5.1
4.4
4.0
2.0
-4.9
-4.1
76.1
-2.1
21.6
56.2
84.0
1.3
13.2

2024f
4.5
2.5
10.2
8.4
7.0
6.4
4.5
5.1
4.4
4.0
2.0
-4.6
-3.7
75.0
-1.8
20.5
54.9
83.1
1.5
13.3

KENYAKey conditions andchallenges

Table 1

2021

Population, million

55.0

GDP, current US$ billion

110.3

GDP per capita, current US$

2005.8International poverty rate ($1.9)

a

37.1
a

66.5

a

86.6

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

40.8

School enrollment, primary (% gross)

b

103.2

b

66.7

Total GHG Emissions (mtCO2e)

77.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2016); Life expectancy(2019).

Kenya’s economy was severely disrupted
by the COVID-19 shock but it hasstaged a strong recovery, and the poverty rate is projected to fall below its prepandemic level in 2022. However, prolonged drought in the north-east hascaused severe hardship in affected areas.
Progress on fiscal consolidation will beessential to achieve a durable, private
sector-led recovery, and to restore spacefor pro-poor spending and investment in
human capital.

Kenya was making strong economic
progress prior to the COVID-19 pandemic, with real GDP growing at anannual average rate of 5 percent andmajor achievements in human development (the highest Human Capital Indexscore in continental sub-Saharan Africa);
in energy access and sustainability (access to electricity almost doubled to 75
percent of households in 2018, based ona nearly 90 percent green energy mix);
and in poverty reduction (the share of
the population living below the $1.90 aday poverty line fell from 45.2 percent
in 2009 to 34.4 percent in 2019). Kenya
aspires to become an upper middle-income country by 2030, which will require a shift away from the economy’s
recent reliance on debt-financed public
investment and towards more private
investment to sustainably generate jobs
and income growth.
To support structural transformation towards a more inclusive and resilient private sector-led economy, it is critical toreinforce fiscal consolidation, since fiscal
space has eroded and debt risks havemounted. Measures are also needed tostrengthen productivity and private investment, by addressing economic distortions (including those which arise froman uneven playing field between the private sector and a large and inefficient
SOE sector), improving the regulatory

and business environment (including by
reducing corruption and excessive redtape), and enhancing access to finance.
Kenya’s economy relies on tourism andrainfed agriculture, and is vulnerable toclimate change and extreme weather
events such as the severe drought currently affecting the north-east of the country.
Over the past decade, climate-related annual losses have been 3-5 percent of GDP,
despite Kenya’s negligible contribution to
global GHG emissions. Climate-related
priorities include phasing out the remaining fossil fuel power supply, increasing
tree-cover, adopting climate-smart agriculture, and making the transportation andwaste management systems more efficientand sustainable.

Recent developments
Whilst the pandemic stalled growth in2020, the economy has recovered, andoutput is well above pre-pandemic levels.
The economy grew by an estimated 6.7
percent in 2021, supported by a strong
recovery of the services sector (Figure1), particularly education, and growth inmanufacturing and construction. Agricultural output, however, contracted by 1.5
percent in 2021, due to below-averagerains. Disruption caused by the omicron
variant of COVID-19 led to some moderation of economic activity in the fourth
quarter of 2021.
Monetary policy remained accommodative. Inflation pressures remained contained overall but the prices of some staple

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

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

Percent, percentage points
8

Poverty rate (%)

6

Real private consumption per capita (constant LCU)

100

16000090

14000080120000

70

4
2

60

100000

50

80000

40

60000

30

0

40000

20
-2

20000

10
2020

2021

Net taxes
Industry
Real GDP growth (percent)

2022

2023

2024

0

Services
Agriculture02005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Sources: Kenya National Bureau of Statistics and World Bank.

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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products have risen significantly, affectedby global supply chain challenges and below-average rains. The below-averagerains have also resulted in deteriorating
food security, especially in the north andeast of Kenya which has been affected bya severe drought (USAID’s Famine Early
Warning Systems Network). The global fuel and food price shocks caused by Russia’s invasion of Ukraine will increase import costs and prices, including of Kenya’s
significant net fuel and wheat imports,
though the duration and magnitude of theprice effects are highly uncertain.
The fiscal outturn in the first half (H1) of
FY2021/22 improved, driven largely by the
economic recovery, a strong rebound in revenues, and new tax policy and administration measures implemented under the government’s medium-term fiscal consolidation program. Total expenditures have remained broadly steady at 10.8 percent of
GDP in H1, with an increase in recurrent
spending being offset by reduced development spending and below-target transfers
to county governments. As a result, the fiscal
deficit in H1 FY2021/22 decreased to 2.5 percent of GDP from 3.2 percent a year earlier.

Outlook
The course of the pandemic remains key tothe outlook but increasing COVID-19 vaccinations will help to mitigate the risks.
The government targets to vaccinate all
adults by end-2022 and with the improvement in vaccine supply, the proportion of
adults fully vaccinated increased from 15.3
percent in December 2021 to 27.8 percent
in February 2022.
With GDP growth projected to average 5.2
percent over 2022–24, growth in real per
capita incomes will help reverse the risingpoverty rates caused by the pandemic.
Poverty is expected to fall to 33.4 percent
in 2022, below the pre-crisis level of 34.4
percent (2019). The baseline projections assume that normal rains support good agricultural harvests to drive food processing,sustain export growth, help anchor inflation expectations, and support households’ consumption.
Progress on fiscal consolidation will bolster confidence and resources for private
sector investment. The fiscal deficit is

TABLE 2 Kenya / Macro poverty outlook indicators

expected to narrow to 4.4 percent of
GDP by FY2023/24, through a mix of
expenditure restraint and revenue measures, including further rationalizationof tax expenditures and introduction ofa digital tax. Public debt is expected to
decline as a share of GDP, benefiting from
economic growth, fiscal consolidation andreduced borrowing costs due to increases
in concessional debt in the financing mix.
Lower domestic borrowing by government will create more room for banks to finance private sector investment.
Domestic risks facing the outlook stemfrom election-related disruptions and adverse weather conditions (currently affecting north-eastern Kenya). External
uncertainty will stem from re-intensification of the pandemic, and the global
price and trade shocks emanating fromthe Russia-Ukraine conflict with potentially adverse impacts on inflation, thecurrent account balance, and the fiscal
deficit (depending on extent to which
global oil price increases are passed on
to retail fuel consumers).

(annual percent change unless indicated otherwise)
2019
5.0
4.9
7.0
3.8
-3.2
1.8
5.2
2.6
3.4
6.7
5.2
-5.3
0.9
-7.4
59.5
-3.2
34.4
65.1
85.9
3.8
41.2

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-0.3
-2.7
4.3
3.4
-8.2
-8.5
0.3
4.8
4.0
-2.2
5.3
-4.6
0.5
-7.9
65.8
-3.9
35.7
65.8
86.2
2.2
39.8

2021e
6.7
7.3
4.2
6.4
8.0
7.5
6.7
-1.5
6.6
9.6
6.4
-5.5
0.2
-8.2
68.2
-3.7
34.3
65.1
85.8
2.2
42.1

2022f
5.0
5.5
4.9
4.1
6.8
7.0
5.0
3.6
3.5
5.9
6.0
-6.0
0.6
-7.5
68.0
-2.8
33.4
64.7
85.6
2.1
43.0

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2005-IHBS and 2015-IHBS.Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
b/ Projection using annualized elasticity (2005-2015) with pass-through = 1 based on private consumption per capita in constant LCU.

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2023f
5.2
5.6
3.6
6.7
7.1
8.0
5.2
3.8
4.0
6.0
5.5
-5.5
0.8
-5.5
66.8
-0.6
32.5
64.2
85.3
2.5
44.4

2024f
5.5
5.8
3.5
7.6
7.4
8.3
5.5
4.2
4.3
6.2
5.0
-5.0
0.9
-4.3
63.9
0.5
31.6
63.7
85.0
2.4
45.8

LESOTHO

Key conditions andchallenges

Table 1

2021

Population, million

2.2

GDP, current US$ billion

2.4

GDP per capita, current US$

1111.8International poverty rate ($1.9)

a

27.2
a

49.9

a

73.2

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

44.9

School enrollment, primary (% gross)

b

120.9

b

54.3

Total GHG Emissions (mtCO2e)5.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2011 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2019).

Economic growth has been modest in recent years. Domestic economy is expected to recover and register a modest
growth of 1.6 percent in 2021. However,political instability, fiscal challenges,
and the COVID-19 pandemic present
significant downside risks. With modest
growth expected in 2022, the poverty
ratio will stary around 30 percent, using the international poverty line.

Real GDP contracted by 6.5 percent in 2020
because of the effects of the COVID-19
pandemic. According to the National
COVID-19 Secretariat (NACOSEC), about
56 percent of Lesotho’s eligible population
have been vaccinated as at mid-March
2022. Even though the number of positive
COVID-19 cases has been low in recent
months, possibility of new waves of infection cannot be ruled out yet, and this is expected to weigh down Lesotho’s exports,
lower remittances and capital inflows andpresent downside risks to growth.
The COVID-19 pandemic has exacerbatedan already dire fiscal position. Southern
African Customs Union (SACU) receipts –the major source of government revenues –have declined further, from 22.1 percent of
GDP in 2020 to 18.8 percent in 2021. Public expenditure remains elevated at about
54.8 percent of GDP in 2021. Consequently,
the financing gap remains wide in the faceof limited government buffers and limited
domestic borrowing capacity. Public debt
has increased – from 48.1 percent of GDP
in 2019 to 60.5 percent of GDP in 2021,
reflecting growing current spending andlarge capital projects.
The country has, in recent years, experienced unstable governments, characterized by weak coalitions and frequentchange in government and/or cabinet
reshuffles which delays developmental
progress. National elections are slated for

October 2022 and more splits in the current ruling coalition have emerged aheadof the elections.
Even before the pandemic, Lesotho grappled with high poverty and unemployment rates. The unemployment rate was
22.5 percent in 2019 (strict definition), rising to 38.3 percent (when the expanded definition that includes discouraged job seekers is used). About a third of the population lives on less than US$1.90/person/day(in 2011 PPP terms). Rural and mountainous regions tend to be the poorest, given
their poorer access to basic infrastructureand services, limited economic opportunities, and vulnerability to climatic shocks
which weighs down agricultural productivity. Remittances from migrant workers,
which play a crucial safety net role, havebeen hard hit by the pandemic.

Recent developments
Lesotho’s economy has been in recession
even before the emergence of the
COVID-19 pandemic. Real GDP contracted by an average 0.6 percent annually between 2017 and 2019 before the sharp 2020
recession. The downturn continued into
the first quarter of 2021, after when somerecovery was observed in sectors like information technology and communications,mining, and manufacturing sectors which
recorded double-digit quarterly growth
rates. It is estimated that the economy rebounded by 1.6 percent in 2021.
Annual inflation rate averaged 6.0 percent in 2021 compared with 5.0 percent

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

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

Percent, percentage points

Poverty rate (%)

15

80

10600

10

70

10400

60

10200

50

10000

40

9800

30

9600

-10

20

9400

-15

10

9200

5
0
-5

Real GDP per capita (constant LCU)

0

-20
2019
2020
Agriculture

2021
Industry

9000
2017

2022
2023
2024
Services
GDP Growth

Source: World bank.

2019

2021

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 2020, driven by higher food and energy prices, and by increased administered prices domestically. The inflation
rate has accelerated to 7.6 percent in January 2022. The current account deficit
narrowed from 3.4 percent of GDP in2019 to 2.0 percent in 2020 primarily due
to a decline in imports.
The fiscal situation remains challenging
with a fiscal deficit of 5.9 percent of GDP
expected in 2021. Central Bank of Lesotho
reduced the policy rate four times from6.25 to 3.5 percent (by 275 basis points) between March and July 2020. The policy rate
has since been increased twice to 4.0 percent per annum to ensure that the domestic cost of funds remains aligned with therest of the region.
Despite the modest recovery in 2021,
poverty levels are estimated to have decreased only marginally from 30.4 percent
in 2020 to 30.1 percent in 2021 (based on
the US$1.90/person/day, 2011 PPP terms).
Other factors – such as rising food prices
and slow labor market recovery fromCOVID-19-related lockdown measures –limit poverty reduction. Recurring climatic hazards which adversely affect performance of the agricultural sector exacerbate the challenge and increase levelsof food insecurity particularly among therural population.

Outlook
The economic recovery is expected topick up momentum over the medium
term. Through 2024, real GDP growth isexpected to average 2.1 percent annually, driven by strong agricultural sector
growth on account of good seasonal rainfall (even though some parts of the country experienced droughts while others experienced floods), the expansion in thehorticulture industry which is anticipated
to come from the Fresh Produce Market
Centre that was launched in 2021, and a
growing domestic medicinal cannabis industry. Growth in the mining industry is
anticipated as several mines resume production. Construction activities associatedwith the second phase of Lesotho Highlands Water Project (LHWP-II) should impact growth positively in the medium
term, as will the construction of roads,
the Mafeteng solar power plant, andMaseru district hospital. Services sector isalso expected to recover due to improved

TABLE 2 Lesotho / Macro poverty outlook indicators

business and consumer confidence as thevaccination rollout improves. On thedownside, infection waves of the
COVID-19 pandemic coupled with emergence of new strains of the virus will
challenge economic recovery.
Key inflationary pressures are expected toemanate from food prices, administeredprices and spill-over effects of invasion of
Ukraine by Russia which will likely driveup food and energy prices. The precarious
fiscal situation and political uncertainly
are also weighing down the economic outlook. A wider fiscal deficit of 8.0 percent
of GDP is expected in 2022. Public debt isprojected to increase steadily to 63.1 percent of GDP by 2023 before moderating.
Other downside risks include (a) generalelections- that would adversely affect project implementation; (b) heavy rains experienced in the beginning of 2022.
Poverty rates is expected to trend downwards but will remain higher than in 2019as pressure on food and energy prices aswell as a fragile economic environment
slow the pace of poverty reduction. The
US$1.90/person/day (in 2011 PPP terms)
poverty rate is projected to fall slightly to
29.6 percent in 2022 and further to 28.4 percent in 2024.

(annual percent change unless indicated otherwise)
2019
2.6
2.6
7.8
-12.2
-13.3
-1.4
2.6
0.8
-5.9
6.1
5.2
-3.4
1.5
-5.6
48.1
-4.4
27.3
49.9
73.3
-1.3
66.9

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-6.5
4.8
19.7
-42.8
-17.5
-0.5
-6.5
8.3
-12.0
-5.9
5.0
-2.0
1.3
-1.1
49.7
-0.2
30.4
52.2
75.9
-5.5
64.1

2021e
1.6
-2.0
-5.3
-1.7
38.1
15.0
1.6
2.3
7.5
-0.4
6.0
-4.9
1.5
-5.9
60.5
-4.9
30.1
52.0
75.5
0.1
63.1

2022f
2.3
3.6
13.4
-6.4
1.6
6.8
2.3
2.4
4.8
1.4
5.3
-9.6
1.6
-8.0
60.0
-7.2
29.6
51.4
75.0
1.5
62.9

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2017-CMSHBS. Actual data: 2017. Nowcast: 2018-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2017) with pass-through = 0.87 based on GDP per capita in constant LCU.

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2023f
2.1
3.6
6.3
38.6
2.2
10.3
2.1
2.4
5.0
1.0
5.3
-7.7
1.7
-3.6
63.1
-2.8
29.0
51.0
74.4
1.8
63.0

2024f
2.0
3.6
-0.4
49.8
2.2
10.3
2.0
2.4
5.0
0.8
5.5
-6.4
1.6
-0.4
45.3
0.3
28.4
50.8
74.0
1.9
63.2

LIBERIA

Key conditions andchallenges

Table 1

2021

Population, million

5.2

GDP, current US$ billion

3.5

GDP per capita, current US$

673.1

International poverty rate ($1.9)

a

44.4
a

75.6

a

93.2

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

35.3

School enrollment, primary (% gross)

b

85.1

b

64.1

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

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2011 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2019).

Liberia’s economy is recovering. GDP
growth is projected to increase from anestimated 4.0 percent in 2021 to 4.4
percent in 2022, driven by mining andcontinued recovery from the pandemic.
Meanwhile, inflation declined from 17.4
percent in 2020 to 7.9 percent in 2021,
and it is expected to stay in single digits in 2022 due to prudent monetaryand fiscal policies. However, there aredownside risks and uncertainties associated with the Ukraine-Russia conflict,the ongoing currency changeover, andthe COVID-19 pandemic.

Liberia's economy is still recovering fromyears of poor economic and social performance. Between 2014 and 2020, the economy contracted by an average of 0.4 percent
per year, and per capita GDP fell by 12.3
percent cumulatively, owing in part to repeated exogenous shocks such as the Ebola
outbreak, the collapse of iron ore and rubber prices, the drawdown of United Nations peacekeeping forces, and the
COVID-19 pandemic. As a result, by 2020,
the poverty rate is projected to have risen
to 52 percent, wiping out nearly half ofthe gains made post-conflict where poverty decreased from 71 percent to 42 percent
between 2007 and 2014. Non-monetary
poverty indicators such as access to healthcare, education, electricity, and basic utilities continue to be low by regional andinternational standards, with rural/urban
and gender disparities exacerbated by unequal access to productive assets, infrastructure, public services, and markets.
Liberia continues to face complex development challenges, including inadequate physical and human capital, ahighly concentrated export structure, anarrow revenue base, significant spending needs, weak governance, and a challenging business environment. Transitioning to an economic path that reliably
generates broad-based improvements inpoverty and social outcomes would require significant investments in physicaland human capital, increased productivity in agriculture and other informal
sector activities, accelerated formal job
creation, strengthened socioeconomic resilience, improved governance, and expanded institutional capacity.

Recent developments
After contracting by 3.0 percent in 2020,
GDP growth recovered to 4.0 percent in
2021, on the back of improved external demand, higher prices for Liberia’s exports,
and the resumption of normal domestic activity. Rubber production increased by 38
percent, year-on-year [y/y], palm oil (12percent, y/y), iron ore (3 percent, y/y), andgold (79 percent, y/y), boosting agricultural and mining output. Cement, beverages,
and electricity production all increased
significantly, reflecting the materializationof pent-up demand and activity in the services sector. Inflation fell to single digits at
7.9 percent in 2021, down from 17.4 percent in 2020 due to the appreciation of the
Liberian dollar and prudent fiscal andmonetary policies. The Central Bank of
Liberia maintained the monetary policy
rates at 20 percent in 2021, well above theinflation rate, and began the implementation of a currency changeover to help curb
disruptive cash shortages and boost confidence in the financial sector. While the rebound in growth and moderation in inflation led to a small recovery in consumption, poverty levels remained high.
The government’s fiscal deficit and public
debt ratio improved in 2021. The overall

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

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

Percent, percentage points
6

Poverty rate (%)

Real GDP per capita (constant LCU)

120

900

5

800

100

4

700

80

3
2

600
500

60

400

1
40

0
-1

300
200

20

-2

Agriculture

Industry

Services

Real GDP growth

0

-3
-4
2019

2020

2021

2022f

2023f

100
0
2007 2009 2011 2013 2015 2017 2019 2021 2023

2024f

Source: World Bank staff calculations based on IMF and CBL data.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Note: see table 2.

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fiscal deficit narrowed from 3.8 percent of
GDP in 2020 to 2.9 percent in 2021, mainly
thanks to strong revenue performance andsuccessful efforts to contain the public sector wage bill. As a result, the public debtto-GDP ratio declined from 55.0 percent in2020 to 53.3 percent in 2021.
Liberia’s current account deficit worsened
despite stronger-than-expected export
growth. The current account deficit
widened from 16.3 percent of GDP in 2020
to 17.7 percent in 2021, mainly due to aworsening trade deficit. While exports increased by 5.4 percentage points of GDP,on the back of higher export prices (e.g.,of gold and iron ore), imports also surged.
The deficit was financed mainly by foreign
direct investment (FDI) (7.3 percent ofGDP) and capital grants. In 2021, Liberia
benefited from a new Special Drawing
Rights (SDR) allocation from the International Monetary Fund of SDR 247.7 million(approximately US$350 million or 7.3 percent of GDP). The additional SDR allocation sharply increased the coverage of international reserves from 2.1 months of imports in 2020 to 4 months in 2021.

Outlook
The economy is projected to expand by
4.4 percent in 2022 and reach an averageof 5.0 percent in 2023-24. Per capita GDP
will return to pre-crisis levels by 2023.
The positive outlook is underpinned bysignificant tailwinds for mining, the government’s planned scale-up of public investment, and the implementation of
structural reforms. Specifically, the government has ratified a new mining concession that would triple the productionof iron ore, boost employment, and attract FDI over the next decade. The sharp
increase in metal prices, especially ironore, presents terms of trade gains andimproved prospects for the mining sector. Inflation is expected to increase due
to rising global food and fuel prices, but
it is projected to remain in single digits as the government’s commitment toregulate the prices of some commodities (e.g., fuel, rice, and transport) helps
mitigate the pressure on domestic prices.
Even so, the conduct of the currencychangeover is crucial for limiting inflation. Fueled by a buoying economy, private consumption per capita is also expected to increase in 2022, despite higher
inflation. This will likely push the poverty rate below 50 percent for the first timesince the pandemic began. The outlook
is subject to the path of the pandemic athome and abroad.
The current account deficit is expected
to remain around 16 percent of GDP.
Liberia’s direct exposure to Ukraine and

TABLE 2 Liberia / Macro poverty outlook indicators

Russia is very limited, as these twocountries together account for 1.5 percent of the country’s imports and lessthan 1 percent of exports. The UkraineRussia conflict will affect Liberia mainly
through changes in commodity prices,with a likely positive net effect on trade.
FDI is expected to increase due to therecent expansion of a mining project.
The country’s foreign exchange reserves
are projected to cover around fourmonths of imports in the medium term.
The fiscal deficit will remain at 2021 levels in 2022 as the national budget for
the year targets a significant increase inrevenue. Domestic revenues are projected to increase, reflecting an increase inboth tax and non-tax revenue, thanks
to royalties and rents from the mining
sector. Meanwhile, total expenditure is
projected to increase driven by the risein government consumption expendituredespite a reduction in the public sector
wage bill. Domestically financed capital
expenditure is also projected to increase
dramatically by 2.2 percentage points ofGDP. Nevertheless, the Ukraine-Russia
crisis could trigger higher inflation andfiscal overruns.

(annual percent change unless indicated otherwise)
2019
-2.5
-2.8
4.0
-7.8
1.6
0.4
-2.4
0.2
1.0
-5.7
27.0
-20.5
-5.6
48.5
-5.0
47.3
78.4
94.1
0.0
35.9

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-3.0
-1.9
-11.6
-7.3
1.2
8.1
-3.0
2.4
0.2
-8.8
17.4
-16.3
-3.7
55.0
-2.5
51.1
80.2
95.1
-0.9
35.0

2021e
4.0
1.2
-3.7
22.0
15.4
1.3
4.0
1.9
16.3
1.1
7.9
-17.7
-2.9
53.1
-1.9
50.6
79.9
94.9
0.0
33.0

2022f
4.4
3.0
1.3
25.3
2.0
3.1
4.4
3.6
9.0
3.1
8.2
-16.3
-2.9
51.1
-1.1
49.4
79.1
94.6
-0.3
30.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2016-HIES. Actual data: 2016. Nowcast: 2017-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2016) with pass-through = 1 based on GDP per capita in constant LCU.

MPO

51

Apr 22

2023f
4.8
3.0
-14.4
27.9
2.0
3.1
4.8
4.8
9.0
2.8
7.0
-15.8
-2.8
49.9
-1.1
47.6
78.4
94.2
-0.6
28.0

2024f
5.2
3.0
-5.8
22.4
2.0
3.1
5.2
5.2
6.0
4.8
7.0
-14.6
-2.3
51.1
-0.7
46.1
76.9
93.8
-0.6
25.3

MADAGASCAR
Table 1

Key conditions andchallenges

2021

Population, million

28.4

GDP, current US$ billion

14.1

GDP per capita, current US$

494.5

International poverty rate ($1.9)

a

78.8
a

91.5

a

97.5

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

42.6

School enrollment, primary (% gross)

b

134.1

b

67.0

Total GHG Emissions (mtCO2e)42.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2012), 2011 PPPs.
b/ Most recent WDI value (2019).

An economic recovery started in 2021 but
was interrupted in 2022 by the combined
impact of a third wave of the pandemic, aseries of climate shocks, and the escalating conflict in Ukraine. In this context,
growth projections were downgraded to
2.6 percent in 2022 and to an average of
4.4 percent in 2023-24, resulting in thepoverty rate remaining close to 80 percent by 2024.

Development prospects in Madagascar
continue to be hampered by the country’s
low growth potential and exposure to frequent, deep, and persistent shocks.
Growth averaged about 3.5 percent fromthe return to constitutional order in 2013
to the onset of the pandemic and was followed by a recession in 2020 that was
about 3 times deeper than in the rest of
Sub-Saharan Africa. Activity had started torecover in 2021 but was interrupted in 2022
by a new wave of COVID-19, a series of extreme weather events and the fallout from
Russia’s invasion of Ukraine. Growth projections was nearly halved for 2022 and are
significantly softer than previously-thanexpected in 2023 and 2024. As a result, thepoverty rate is now predicted to remainclose to 80 percent over the next couple ofyears, compared with an average of 42 percent for the rest of Sub-Saharan Africa.
A further escalation of geopolitical tensions could heighten the risk of a hardlanding of the global economy, which
could jeopardize the recovery in Madagascar. At the national level, vulnerability toadditional climate shocks, low vaccination
rates, and policy uncertainty are among
the key risks to the outlook. Beyond theneed to scale up the response to recent
shocks, accelerating growth and reducing
poverty will require urgent reforms supporting private investment, connectivity
infrastructures and access to basic services,

all of which require deep governance andinstitutional reforms.

Recent developments
During 2021, Madagascar faced two additional waves of COVID-19, one starting inMarch and another in November. Between
these two waves, domestic activity had
started to recover but private investment
remained weak and employment registration started moderating again towards theend of the year. The reopening of the Ambatovy mine in March 2021 and rising international prices of nickel and cobalt bolstered export revenues and industrial activity during most of the year. However,agricultural production, which is the main
source of income for an overwhelming majority of the population, remained subdued, which notably reflected a weak rice
harvest. Severe droughts in the South also
led to widespread crop failure and growing food insecurity. Households in mostaffected areas ran out of food reserves andhave resorted to desperate feeding practices. Many households have also been
forced to sell assets, accumulate debt, or
migrate in search for food.
Despite an unprecedented sequence ofshocks and growing financing needs,
macroeconomic stability has been maintained throughout the crisis. Access toemergency lending allowed the government to increase public spending in both2020 and 2021, in contrast with the experience of previous recessions when a sharp
contraction in public spending deepened

FIGURE 1 Madagascar / Growth and income per capita
levelsFIGURE 2 Madagascar / Actual and projected poverty rates
and real GDP per capita

Percent
10

Poverty rate (%)

Index = 100 in 1960
80

5

75

0

70

Real GDP per capita (constant thousand LCU)

100

820

95

800

90

780

85

-5

65

-10

60

760
80
740

75

720

70

GDP growth
GDP per capita growth
GDP per capita level (RHS)

-15
-20
2000

2005

2010

2015

55

65

700
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

50
2020

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment
Global Practices.
MPO

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

52

Apr 22the crisis. While helping to alleviate theimpact of the crisis, this countercyclical increase in both current and capital spending
led the budget deficit to 4.1 percent in 2020
and 6.3 percent in 2021, which contributed
to an uptick in public debt to 52 percent
of GDP in 2021 (up from 38.5 percent in2019), but still well below risk thresholds
considered for a country like Madagascar.

OutlookA third wave of the pandemic followed bya sequence of severe weather events andthe adverse effects from the conflict in
Ukraine are expected to contribute to decelerating activity in 2022. In particular,
more than 450.000 people were affected byfour tropical storm systems hitting Madagascar since the start of the year, making

it one of the most disruptive cyclonic seasons in recent years. Russia’s invasion of
Ukraine is also projected to have important
repercussions, as it will negatively impact
economic prospects in the European
Union, which is Madagascar’s main trading partner, and has already led to significant upward pressure on global energy
and food prices. This conflict will resultin slowing export growth, deteriorating
terms of trade and rising inflation in
Madagascar. The effect on the trade deficit
will be somewhat offset by a continued increase nickel and cobalt prices and a gradual pick up in tourism activity. In this context, growth projections for 2022 weredowngraded to 2.6 percent, from 5.4 percent previously, which implies that GDP
per capita would stagnate and remain
about 8.5 percentage points below pre-crisis levels (Chart 1). Growth is expected topick up to 4.2 percent in 2023 and 4.6 per-TABLE 2 Madagascar / Macro poverty outlook indicatorscent in 2024, with structural constraints
and slowing external demand preventing
a faster rebound. The growth potential of
the economy has been negatively impacted
by deteriorating human capital, private investment and public sector governanceduring the crisis and is not expected to exceed 4 percent in the absence of a significant reforms.
Against this backdrop, the poverty rate is
projected to remain well above pre-crisis
levels. The expected recovery in economic
activity will translate into a gradual decline in poverty rates, from an historicalhigh of 81 percent in 2020 to 80.2 percent
in 2023 and 79.9 percent in 2024, thereby
remaining above pre-crisis levels (Chart 2).
Progress with poverty reduction will
largely be determined by progress with thepolicy response to recent crises, the capacity of the economy to rebound and the absence of additional climate shocks.

(annual percent change unless indicated otherwise)
2019
4.4
1.2
1.9
12.9
10.9
4.6
4.3
5.5
6.6
3.1
5.6
-2.3
-1.4
38.5
-0.7
77.4
90.9
97.3
2.8
14.5

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-7.1
-2.9
1.8
-10.1
-22.6
-13.8
-8.5
0.6
-29.5
-6.2
4.2
-5.4
-4.1
49.0
-3.4
81.0
92.1
97.7
-1.4
14.1

2021e
4.4
1.9
15.5
3.0
11.6
7.4
4.7
1.5
13.2
4.4
6.2
-5.3
-6.3
52.1
-5.4
80.6
91.9
97.6
0.7
14.9

2022f
2.6
2.5
-0.7
5.2
4.9
4.5
2.6
1.8
5.0
2.4
7.5
-6.2
-6.0
53.9
-5.0
80.6
91.9
97.6
0.4
15.0

2023f
4.2
3.4
0.9
8.9
5.4
5.4
4.2
2.8
5.6
4.5
6.4
-6.1
-5.4
55.1
-4.3
80.2
91.7
97.6
0.7
15.4

2024f
4.6
3.6
2.2
8.5
6.4
6.1
4.6
2.8
5.9
5.1
6.1
-6.1
-4.4
55.2
-3.4
79.9
91.5
97.5
0.9
15.9

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2012-ENSOMD. The historical poverty rates have been revised with respect to their CPI to account for the fact that the 2012-ENSOMD survey work
took place from September 2012-November 2013. Previously, CPI measures used the starting year (2012) of the survey field work only.
b/ Projection using neutral distribution (2012) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

53

Apr 22

MALAWI

Key conditions andchallenges

Table 1

2021

Population, million

19.6

GDP, current US$ billion

12.3

GDP per capita, current US$

626.3

International poverty rate ($1.9)

a

73.5
a

90.4

a

97.1

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

38.5

School enrollment, primary (% gross)

b

144.8

b

64.3

Total GHG Emissions (mtCO2e)

28.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2011 PPPs.
b/ Most recent WDI value (2019).

Malawi’s GDP growth rose to 2.8 percent
in 2021, boosted by an improved agricultural harvest and the diminishing impactof the COVID-19 pandemic. However,growth is projected to stagnate in 2022
due to weather shocks and increased commodity prices, contributing to rising inflation and challenging the government’s
fiscal consolidation efforts. These dynamics reduce the impact of growth on poverty, which remains persistent and isamong the highest in the region.

The economy continues to recover fromthe impacts of the COVID-19 pandemic.
Cases surged during the spread of theOmicron variant in late 2021, but symptoms associated with the strain were
milder and the government did not impose
substantial additional mobility restrictions. However, vaccine uptake is low, andthe country remains susceptible to newstrains of the virus.
Exports continue to recover slowly,
while imports have been increasingfrom a higher base, which continues to
weaken the current account balance. Investment is limited by a weak business environment characterized by limited access to credit, numerous non-tariff barriers, and high transport costs.
Together with erratic electricity supply,
this constrains diversification and increased value addition despite thegrowth of some sectors, such as soya
and mining. High reliance on subsistence rain-fed agriculture, susceptible toweather shocks, further impedes economic activity.
Implementation of expansionary policies
and weak fiscal management have contributed to high fiscal deficits, resulting
in increased high-cost domestic debt.
This has crowded out private investment. The recent uptake of non-concessional external debt has pushed Malawi
into high risk of public debt distress.

FIGURE 1 Malawi / Fiscal deficit and public debt

Percent of GDP

Recent developments
Economic growth increased to 2.8 percent
of GDP in 2021 despite three waves of
COVID-19 infections. Growth was driven
by the strong performance of the agricultural sector, aided by favorable weather
and increased input use. This offset weakgrowth in industry and services, whichwere more significantly impacted by restrictions related to COVID-19.
Headline inflation increased to 13.0 percent in February 2022, above the monetary
policy rate of 12 percent. Food inflation
reached 15.3 percent, largely due to an increase in maize prices, while non-food inflation has been driven by rising fuelprices. The official exchange rate remained
relatively stable for the second half of 2021
but rising global commodity prices contributed to inflation, and the spread between the official and cash exchange rate
has widened.
The FY22 budget deficit is expected toincrease further, reaching 9.4 percent
of GDP. The government is optimistic

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

10
9

Poverty rate (%)

70

120

60

100

50

80

8

Real GDP per capita (constant LCU)
400000390000380000

7
6

40
30

4
3

37000060

5360000350000403400002020233000010

1-

Associated higher debt servicing costs
further reduce fiscal space for government investment.
Frequent weather shocks, along withthe slow pace of structural transformation, have contributed to the highand stagnant poverty rate in the last
decade. Between 2010 and 2020, theshare of people below the $1.90 per
day poverty line increased from 72
percent to 74 percent.

0
2010

2012

2014 2016
Fiscal Deficit (lhs)20182020 2022 2024
Public Debt (rhs)-

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

MPO

320000
2010

2012

2014

2016

2018

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: See Table 2.

54

2020

that revenues (including disbursementof grants) will increase to 16.7 percent
of GDP. Expenditure is expected to increase significantly to 26.0 percent ofGDP, driven by a surge in domesticallyfinanced development expenditure, rising debt servicing costs, social benefits(including implementation of the Affordable Input Program), and grants.
The resultant deficit will be financed using high-cost domestic resources, further exacerbating an already challenging
public debt situation.
The current account deficit remainedlarge in 2021, at 13.0 percent of GDP.
As mobility restrictions imposed to contain the pandemic were slowly eased,
the performance of exports improved.
Rising prices of goods such as fueland fertilizer have resulted in rising import costs. Rising food prices have impacted households’ budget by reducing
consumption levels, resulting in declining welfare and counteracting improvements in economic growth. In turn,
Malawi’s $1.90 international poverty
rate has remained at 74 percent.

Outlook
Growth is projected to decline to 2.1
percent in 2022, from 2.8 percent in
2021. This reduction is largely due toweather-related shocks, macro-fiscal imbalances, and the impacts of the RussiaUkraine war. The late onset of rains has
been compounded by heavy rainfall andfloods caused by Tropical Cyclones Ana
and Gombe, which have negatively impacted production of key export crops
and other sectors that rely on agricultural inputs. Electricity disruptions
from the damaged Kapichira hydroelectric power station are affecting industry.
The Russia-Ukraine conflict has impacted
the economy through both direct price effects and implications on downstream activities. Instability in global commodity
markets is resulting in higher prices for fuel and fertilizer, further constraining foreign currency reserves and exerting downward pressure on the exchange rate. Global commodity prices, which were already

TABLE 2 Malawi / Macro poverty outlook indicators

elevated from pandemic-induced supplychain disruptions and increased global demand, are also rising due to the conflict.
The current account deficit is estimated toincrease to 14.4 percent of GDP. Exports
are expected to maintain their current upward momentum, but the cost of imports
is expected to increase, offsetting export
gains. Rising commodity prices will also
exert upward pressure on inflation. Supply-related pressures on the agriculture
sector due to weather shocks could pushaverage annual inflation into double digits.
As a result of consolidation efforts on
both revenues and expenditures, the FY23
fiscal deficit is expected to decline to 8.2
percent of GDP. Revenue is projected toincrease to 16.8 percent of GDP driven
by an increase in grant disbursements.
Meanwhile, expenditure is expected todrop to 25 percent of GDP.
Due to the weather-related shocks affecting agricultural productivity and incomes, the share of the population below
the international $1.90 poverty line is projected to stagnate around 74 percent in
2022 and 2023.

(annual percent change unless indicated otherwise)
2019
5.4
5.4
5.4
5.4
5.4
5.4
6.0
5.9
7.7
5.5
9.4
-13.8
0.3
-4.4
45.3
-1.5
73.5
90.4
97.1
1.6
34.2

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
0.8
0.8
0.8
0.8
0.8
0.8
0.8
3.4
1.2
-0.5
8.6
-11.7
0.6
-6.4
52.8
-3.3
74.3
90.7
97.2
1.4
34.2

2021e
2.8
2.9
-2.9
6.1
5.5
4.3
2.8
5.2
1.9
2.0
9.3
-13.0
0.3
-7.1
53.6
-3.3
74.3
90.7
97.2
2.1
34.2

2022f
2.1
2.5
7.1
0.8
2.1
3.6
2.1
-3.0
2.0
4.4
12.6
-14.4
0.8
-9.4
61.5
-4.9
74.4
90.8
97.2
1.9
34.5

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2019-IHS-V.Actual data: 2019. Nowcast: 2020-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2019) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

55

Apr 22

2023f
4.3
5.0
0.5
2.5
3.6
4.0
4.3
3.4
4.1
4.7
11.5
-13.6
0.6
-8.2
60.3
-2.9
74.0
90.5
97.1
2.4
34.7

2024f
4.2
5.2
-3.6
6.2
4.1
5.2
4.2
3.1
4.5
4.6
9.8
-13.4
0.6
-8.3
58.9
-3.2
73.4
90.3
97.1
1.8
34.9

MALI

Key conditions andchallenges

Table 1

2021

Population, million

20.9

GDP, current US$ billion

18.5

GDP per capita, current US$

887.2

International poverty rate ($1.9)

a

16.3
a

49.5

a

77.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

36.1

School enrollment, primary (% gross)

b

75.6

b

59.3

Total GHG Emissions (mtCO2e)47.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

Two military coups in August 2020 and
May 2021 and growing insecurity haveresulted in a stagnant economy, withnegligible per capita growth in 2021 andprojected for 2022, exacerbated by foodprice inflation that particularly hurt thepoor. The medium-term outlook is subject
to significant downside risks, notably
with uncertainty over the political transition and regional sanctions, with poverty
expected to decline only slightly due tolimited per capita income growth.

Insufficient investment in human andphysical capital has hindered Mali’s
structural transformation. Subsistence
farming with low productivity still dominates agriculture, manufacturing is concentrated in low-value added textiles andagri-food, while cotton and gold dominate exports. The services sector expanded rapidly over the last decade but lacks
the skilled labor and infrastructure basefor sustained growth. The under-diversified economy remains vulnerable to commodity price volatility and climate-related shocks. Contingent liabilities related tothe energy utility and the surge of domestic debt constitute significant fiscal risks.
National monetary poverty has stagnatedover 2011-2020 while nonmonetary poverty indicators show mixed results: from2011 to 2020 the share of households witha child not attending school fell from62 to 41 percent, while the share withsick members unable to receive healthcarerose from 22 to 37 percent.
Violent conflict and insecurity have expanded to central and southern regions,disrupting agriculture and service delivery
outside Bamako. Though transfers to local
governments have increased, newly created administrative regions are not adequately staffed to provide public services.
Following the postponement of national
elections, due in February 2022, ECOWAS
imposed tough sanctions against Mali in

January 2022 including border closure,suspension of commercial and financialtransactions, freeze of public assets andsuspension of regional funding.

Recent developments
The economy grew by 3.1 percent, 0.1
percent in per capita terms, in 2021, driven by services and agriculture as thecotton sector recovered. Private consumption and public investment also rebounded. The current account deficit (CAD)widened in 2021 to 4.3 percent of GDP,as the terms of trade deteriorated following the gold price stabilization and oil
price rise. Exports declined from lower
gold and cotton exports, while importsrose from higher domestic demand.
The fiscal deficit stayed high, at 5.5 percent of GDP, with public expenditure estimated at 27.9 percent of GDP, driven
by a larger wage bill, capital expenditureand quasi-fiscal measures to contain retailfood and fuel prices. Revenues increased
following improved indirect tax collections. Financing was covered by concessional credits, grants and domestic borrowing. Public debt rose to 52.7 percent
of GDP though Mali remains at moderaterisk of debt distress.
Annual average inflation rose to 4 percent
in 2021, reaching 8.9 percent (y/y) in December, driven by food (5.2 percent), particularly cereals (8.9 percent), and services. Mali’s monetary and exchange rate
policies are managed by the BCEAO,
which maintains a peg between the CFA

FIGURE 1 Mali / GDP growth, fiscal and current accountbalances

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

Percent
6

Poverty rate (%)

Percent of GDP
0

Real GDP per capita (constant LCU)

100

290000590280000

4

80

-2

2

-4

1
0

60

26000050

25000040

24000030-623000020-1-2270000

70

3

2017

2018

2019 2020e 2021e 2022p 2023p 2024p
GDP growth (%)
Fiscal balance (% of GDP), rhs
Current account balance (% of GDP), rhs

22000010-802100002006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Sources: Malian government and the 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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Franc and the Euro. Its reserves reached
5.8 months of imports of goods and services in 2021 following the recovery in export repatriation proceeds. Mali’s WAEMU membership was suspended as partof the sanctions. Commercial banks still
benefit from the Central Bank’s refinancing operations (at a reduced level), while
the government’s access to the regional
market was suspended.
With near zero per capita income growth,
the extreme poverty rate (US$1.90/day percapita, 2011 PPP) remained at 17.6 percent,though high food inflation and insecurity
disproportionately impact poor and vulnerable households, who spend 46 percentof the budget on food, compared with 31
percent for the non-poor.

OutlookIn 2022, the economy is expected to growat 3.3 percent, which reflects the impactof regional sanctions on the construction
and service sectors that depend on regional supply networks. However, thisprojection assumes that the sanctions will

expire by the end of March 2022. Growthis expected to recover gradually, reaching
5.2 percent on average over 2023-24. Highlevels of inflation will continue in 2022
but will normalize towards the regionaltarget (2 percent) by 2024. The CAD is
projected to stabilize around 4.2 percent
of GDP in 2022 and narrow to 3.5 percent of GDP by 2025 with the easing ofoil prices.
The fiscal deficit is expected to narrow
to 4.5 percent of GDP in 2022, as partof a fiscal consolidation program that targets returning to the regional ceiling of
3 percent of GDP by 2024. Tax revenue
is expected to slightly decline due to theslow recovery and trade embargo, while
the suspension of international financial
flows limits financing options. Spending
should be reprioritized away from nonpriority capital investment in responseto the fiscal constraints. Public debt willsubsequently decline to 48.2 percent of
GDP by 2024.
WAEMU reserves are expected to fall
to around 5.5 months of imports in
2022 and 5.3 months in 2023 and2024, reflecting faster growth in imports and a reduction in net capital

TABLE 2 Mali / Macro poverty outlook indicators

inflows, due to the uncertain environment for Eurobond issuances.
The extreme poverty rate is projected tostagnate at around 17.5 percent in 2022,
due to the high projected population
growth rate of 2.9 percent over 2021-2023.
Protracted sanctions may reduce employment and incomes for the urban poor engaged in construction, transport, commerce and hospitality. Internally displaced
persons and refugees will increasingly
flock into Bamako when the government
is ill-equipped to mitigate humanitariancrises and support the vulnerable.
The outlook is subject to multiple downside risks, the most important being regional sanctions extending beyond March,
but also from intensified insecurity, further
climatic shocks, food insecurity and new
COVID outbreaks. It is likely that at least
some of these risks will materialize andconcurrent shocks are possible. The Russia-Ukraine war presents additional risks
through higher food and energy prices.
The projections reflect recent sharp increases in commodity prices since January2022, though with a high degree of uncertainty. Higher gold prices could help offset
the negative impact of surging oil prices.

(annual percent change unless indicated otherwise)
2019
4.8
3.8
4.0
6.3
2.3
5.9
4.5
4.0
3.7
5.2
-2.9
-7.5
5.0
-1.7
40.7
-0.7
15.7
48.3
77.4
4.8
17.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.2
1.9
4.5
-1.2
0.5
-2.9
-1.1
-4.8
-0.1
1.4
0.5
-2.3
3.1
-5.4
47.3
-4.2
17.6
50.8
78.7
-1.5
17.6

2021e
3.1
5.0
11.2
3.8
-0.5
10.1
3.1
2.2
0.7
4.9
4.0
-4.3
2.4
-5.5
52.7
-4.0
17.6
50.8
78.5
6.4
17.9

2022f
3.3
4.0
2.8
-2.1
2.1
1.0
3.3
4.8
2.6
2.5
7.0
-4.3
2.4
-4.5
49.8
-2.5
17.5
50.6
78.4
4.0
18.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018/19 EHCVM. This survey replaced the previous 2009-ELIM survey used to calculate poverty rates in previous years.
b/ Projection using neutral distribution (2018) with pass-through = 0.87 based on GDP per capita in constant LCU.

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2023f
5.3
4.0
4.1
8.4
5.0
3.7
5.3
5.0
6.0
5.2
2.5
-3.7
2.4
-3.5
49.0
-1.8
16.3
49.3
77.8
4.3
18.5

2024f
5.0
4.0
2.1
7.5
5.0
3.1
5.0
5.0
4.0
5.4
2.0
-3.9
2.6
-3.0
48.2
-1.4
15.5
47.9
77.3
4.4
19.0

MAURITANIA
Table 1

Key conditions andchallenges
2021

Population, million

4.8GDP, current US$ billion

8.3

GDP per capita, current US$

1735.8International poverty rate ($1.9)

a

6.0
a

24.1

a

58.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

32.6

School enrollment, primary (% gross)

b

100.4

b

64.9

Total GHG Emissions (mtCO2e)

14.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2011 PPPs.
b/ Most recent WDI value (2019).

Growth rebounded in 2021 to 2.3 percent,supported by extractives and services,while extreme poverty remained at 5.8
percent. Fiscal balances remained positive, at 2.5 percent of GDP, supported bydonor financing. Growth is expected toreach 7.7 percent by 2024 with the startof gas production. Downside risks include
rising inflation pressures, potentially exacerbated by a prolonged conflict in
Ukraine, export price volatility, and regional insecurity.

Macroeconomic stability had improved
before the Covid-19 pandemic from improved terms of trade and reforms to
reduce fiscal deficits after the 2014-2015
commodity price shock. Growth increased to 5.8 percent in 2019, driven by
extractive sector growth of 14.9 percent.
However, with the pandemic, structural reforms were delayed, and the economy remains undiversified and reliant on
the extractives sector. Between 2015 and2019, the Human Development Index remained unchanged, ranking Mauritania
157th out of 189 countries. This may bepartially explained by insufficient investment in human capital and basic infrastructure, and the challenges of channeling economic gains to address development constraints.
The negative impact of the pandemic onhuman, economic, and social activities
declined markedly in 2021, reflected by arebound in growth and government mitigations measures. The numbers of people in extreme poverty fell to 7,200 in
2021 from 38,000 in 2020. Phone survey
results suggest that 20 percent of households fell into extreme poverty in July
2020 compared to 16 percent in May 2021.
Since 2021, the Government has been implementing priority programs to sustain
growth by supporting inclusive job creation, social protection, and infrastructuredevelopment, as well as mitigating the

FIGURE 1 Mauritania / Evolution of main macroeconomic
indicators
Percent, percentage
10Growth rebounded in 2021 to 2.3 percent(-0.4 percent in per capita terms) from acontraction of -1.8 percent in 2020. Services
contributed 1.1 percentage points (pp) to
GDP growth supported by the relaxationof containment measures, vaccination of
the population, and the growing extractives sector. The main drivers of growth
were private investment, government consumption and exports. The exchange rate
remained stable in 2021, while average
headline inflation rose from 2.4 percent y/y
in 2020, to 3.6 percent y/y in 2021, driven
by higher food prices.
The current account deficit (CAD) narrowed from 7.1 percent of GDP in 2020,
to 6.6 percent of GDP in 2021 on accountof favorable exports prices. The CAD was

Poverty rate (%)

Real GDP per capita (constant LCU)

70

-2

60000
58000

60

-4
6

Recent developments

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

Percent of GDP
0

8

impact of climate related shocks on the
primary sector, especially fisheries.
Poverty reduction is threatened by risingfood and energy prices, a higher cost ofliving, and supply disruptions. These imply a decline in extreme poverty rates ofjust 0.11 and 0.2 percent points per year between 2022 and 2024 using the US$1.9/day
and US$3.2/day (2011 PPP) international
poverty lines respectively. To meaningfully reduce the absolute number of the poorby 2024, agriculture sector reforms are necessary to support the mechanization, irrigation, and the use of improved seedlings
to enhance domestic food production andresilience, and the consumption of cheaper
locally produced cereals and grains.

56000

-6

50

4

-8

40

52000

2

-10

30

50000

-12

0
-2
-4

2015 2016 2017 2018 2019 2020 2021e 2022p 2023p 2024p
GDP growth (%)
Primary fiscal balance (% of GDP)
Current account balance (% of GDP, rhs)

-14

20

-16

10

54000

48000
46000

-18

44000

0

42000
2008 2010 2012 2014 2016 2018 2020 2022 2024

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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financed by foreign direct investment,
donor financing, the suspension of debt
service, and the allocation of special drawing rights. Gross international reserves increased to 6.2 months of imports of goods
and services in 2021, from 4.8 months ofimports in 2020.
The overall fiscal balance remained insurplus at 2.5 percent of GDP in 2021 driven by increases in taxes and mining revenues. Domestic revenues rose with increased economic activity, stronger domestic demand, and higher dividend payments. Expenditure increased from 19.5
percent of GDP in 2020 to 22.8 percent in
2022, driven by higher current expenditure. Though at high risk of external debt
distress, public debt remains sustainable,
falling from 59.3 percent of GDP in 2020,
to 56.7 percent in 2021.
The 2021 economic recovery was led by theindustrial sector, though it employs one
percent of the poor (Table 2). Agriculturaland services sectors, which employ 57 percent and 42 percent of the poor, respectively, grew by 0.7 percent and 2.5 percent. Extreme poverty, based on the international

poverty lines of US$1.9/day and US$3.2(2011 PPP), remained unchanged in 2021, at
5.8 percent and 23.8 percent, respectively.

Outlook
The ongoing conflict in Ukraine is expected to have a mixed impact on Mauritania.
It is projected to have negative impact on
inflation, through higher imports prices offood and crude oil, and a positive impact
through higher iron ore and gold export
prices. The net effect should be positive on
the current account, but negative on thefiscal account, as government fuel subsidies may be increased to maintain a constant administered price.
The economy is expected to continue torebound in 2022, by 4.5 percent (5.1 per
capita terms) and over the medium term.
Growth will be driven by a successful
vaccine roll-out, higher gold and ironproduction in response to rising international prices, and stronger substitution ofimported cereals with locally produced

TABLE 2 Mauritania / Macro poverty outlook indicators

alternatives. In the medium term, growth
will be sustained by gas production starting in 2024, financial services and public
sector investments. Inflation is expected
to gradually fall to 4 percent y/y in 2024
from 5.3 percent in 2022.
The CAD is projected to deteriorate to 8.9
percent of GDP in 2022 with higher imports of equipment for mining and gas industry. It should improve to 4.3 percent of
GDP in 2024 as new gas exports offset lower projected prices for iron exports. FDI related to the extractive industry and concessional borrowing should finance the current account, with resulting gross international reserves of more than 5 months ofnon-extractive imports.
Fiscal balances are projected to slightly deteriorate to a deficit of 0.5 percent of GDP
in 2022, due to the scaling up of public investment and stronger spending on education, health, and social protection. The authorities are expected to continue renegotiating for better financial terms for public
debt to lower costs and levels. As real GDP
per capita rises, poverty rates are projected
to trend downwards (Figure 2).

(annual percent change unless indicated otherwise)
2019
5.8
2.7
1.0
24.4
19.1
11.7
6.6
8.7
5.6
6.2
2.3
-10.5
11.2
2.0
63.5
3.0
5.7
23.6
57.6
2.2
33.5

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.8
2.7
9.2
-8.9
-1.9
2.0
-1.0
-4.0
2.7
-1.5
2.4
-7.2
11.4
1.9
65.5
3.2
5.8
23.8
58.2
1.5
34.3

2021e
2.3
2.5
12.6
12.8
-2.5
2.1
2.3
0.7
3.3
2.5
3.6
-6.6
11.7
2.5
59.3
3.4
5.8
23.8
58.2
4.5
33.8

2022f
4.5
2.3
5.7
5.2
3.4
2.4
4.5
0.9
3.9
6.4
5.3
-8.9
11.4
-0.5
56.7
0.5
5.8
23.7
57.9
2.2
34.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2008-EPCV and 2014-EPCV.Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024.
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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2023f
5.3
2.4
3.5
6.4
4.8
2.5
5.3
1.0
4.0
7.8
5.1
-7.8
8.5
-0.6
56.7
0.4
5.7
23.6
57.7
2.9
34.9

2024f
7.7
2.7
7.6
6.9
8.6
2.4
7.7
1.1
6.1
11.2
4.0
-4.3
8.0
-0.4
54.5
0.5
5.6
23.4
57.1
3.4
35.8

MAURITIUS
Table 1

Key conditions andchallenges
2021

Population, million

1.3

GDP, current US$ billion

11.1

GDP per capita, current US$

8654.6
a

2.2

a

12.7

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

36.8

School enrollment, primary (% gross)

b

99.5

b

74.2

Total GHG Emissions (mtCO2e)

6.3

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2011 PPPs.
b/ Most recent WDI value (2019).

GDP grew 3.9 percent in 2021 aided bywidespread Covid-19 vaccination, although subsequent virus waves dampened
tourism recovery and output remains below pre-pandemic levels. External factors
fuel inflation, while public debt is at ahistorically high level. Recovery hinges on
the creation of fiscal space to address
longstanding structural challenges andboost preparedness for future shocks. The
effects of Covid-19 reversed recent gains
in poverty reduction and female labor
force participation.

Mauritius became a High-Income Countryin July 2020 based on 2019 data, but fellback into Upper-Middle income categoryin July 2021 as real GDP plunged by 14.9
percentage points in 2020 amid theCovid-19 pandemic. Even before the Covid
pandemic, several interrelated structural
challenges had rendered the country’s
growth trajectory more fragile. These include stagnating private investment, sustained loss of export competitiveness, skill
shortages coexisting with high structural
unemployment, rising inequality, andmounting pressure on public financesfrom high and increasing social security
spending driven by the ageing population,
leading to persistent fiscal deficits and a
growing public debt to GDP ratio.
Mauritius’ handling of the Covid-19
health emergency was very successful,and the extensive state support was effective in protecting livelihoods. However, this came at high fiscal cost, causing public debt to spike despite a Rs
55 billion (12.6 of GDP) non-refundable
transfer to government from the Bank of
Mauritius in FY2020/21, which followed
a previous Rs 18 billion transfer (3.9 ofGDP) under the FY2019/20 budget. Additionally, the blurring in the separationof monetary and fiscal functions stemming from the direct involvement of the
BoM in the Covid-19 response, as wellas through the newly created Mauritius

Investment Corporation owned by it, increased contingent liabilities.
Achieving inclusive growth will require
overcoming constraints to a more inclusive
labor market. This includes increasing theparticipation of youth and women withlow educational attainments. Over 50,000
youth aged 16 to 29 are neither in education nor in employment, and about 1 outof 3 of these has obtained at most a certificate of primary education. Similarly, only
1 in 2 women participates in the labor market, and only 1 in 3 among women withlow education. The impact of Covid-19 reversed recent gains in labor force participation of women. Women were significantly more likely to be displaced during
this time, while men and women with abetter education were significantly lesslikely to be laid off overall.

Recent developments
GDP grew an estimated 3.9 percent in
2021, although subsequent Covid-19
waves dampened growth and output remains below pre-pandemic levels. A successful Covid-19 vaccination campaign resulting in 76 percent of the population being fully vaccinated by end-February 2022
has been a cornerstone of recovery. However, a large output gap remains intourism, with 179,780 arrivals in 2021
marking a 41.8 percent decrease compared
to 308,980 in 2020. Even after full reopening of borders since October 1, monthly
arrivals hovered below 50 percent of prepandemic figures. Total exports increased

FIGURE 1 Mauritius / General government balance anddebt

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

Percent of GDP
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
-22
2012/13

Poverty rate (%)

2015/162018/192021/22e
General government balance (lhs)
Primary balance (lhs)
General government debt (rhs)

Percent of GDP
110
100
90
80
70
60
50
40
30
20
10
0
2024/25f

350000300000202500001520000010150000100000

5

50000

0

0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Real GDP pc
Upper middle-income pov. rate

Sources: Statistics Mauritius, World Bank staff estimates.

Source: World Bank. Notes: see Table 2.

MPO

Real GDP per capita (constant LCU)

25

60

Apr 22Lower middle-income pov. rate

16.9 percent in 2021 compared to 2020, driven by manufactures. As total imports increased by 29.8 percent, the trade deficit
was 39.4 percent higher. However, the current account deficit still narrowed from
12.5 to 11.1 percent of GDP, aided by net
income inflows.
Fiscal deficit escalated to 19.9 percent in
FY20/21, and despite being partially financed through a 12.6 percent of GDP nonrefundable Central Bank transfer, stillcaused public debt to spike to 100.6 percent of GDP. Headline inflation rose to 4
percent in 2021 from 2.5 percent in 2020,
driven by external supply shocks leading
to higher freight, energy, and food prices.
As oil prices rose to historical heights inthe wake of the Russian invasion of
Ukraine and ensuing sanctions on Russia,
the BoM raised the Key Repo Rate 15 bps
to 2 percent on March 9, representing its
first hike since June 2011. The removal of
Mauritius from the FATF, UK and EU
watchlists between October 2021 and January 2022 bolstered the financial sector, andfollowing closing of the Mandatory Offer
made by Airport Holdings Limited on October 15, 2021, the state-controlled entity

expects to fully control Air Mauritius by
end-March 2022. The rising of the Mauritian flag in the Chagos archipelago on February 14 during a scientific expedition to
the Blenheim reef signaled Mauritius’ intent to recover the islands in dispute with
the UK.
Poverty (Upper-MIC threshold of $5.5 a
day 2011 PPP) fell from 18 to 10 percent
between 2012 and 2019. However, given
the dramatic contraction of GDP in 2020,
poverty is estimated to have increased byover 5 percentage points in 2020, subsequently dropping by over 1 point in 2021.

Outlook
GDP is expected to grow by 5.9 percent in
2022 and 6.0 in 2023, before decelerating to
3.9 percent in 2024, in a global context of
low growth, high inflation, and heightened
geopolitical tensions.
The current account deficit would rise to
14.2 percent of GDP in 2022 hit by higher oil and food import costs and withrising airfare costs hindering a stronger

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
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)

recovery of tourism, before gradually
narrowing down over the medium term,
assuming continued recovery of tourism
and efforts to strengthen export competitiveness. The fiscal deficit is expected to moderate to 9.8 percent in FY21/
22 as the economic recovery accelerates
and Covid-19 support measures are lifted, aiding a progressive fiscal consolidation. Public debt would peak at 103.7
percent of GDP in FY21/22 and gradually decrease over the medium term. Projections indicate that poverty will fall to
10 percent, the pre-COVID-19 level, wellinto 2024.
Significant downside risks cloud the horizon. New Covid-19 variants may continue
to inhibit the rebound of tourism, while escalation of war in Europe and harsher economic sanctions could push fuel and foodprices higher and further disrupt global
supply chains, fueling inflation. Pensions’reform and the phased unwinding of
Covid-19 support will be key to maintaindebt sustainability and create fiscal space
to address structural challenges and boost
preparedness facing future shocks, including from climate change.

(annual percent change unless indicated otherwise)
2019
3.0
3.2
2.0
6.1
-4.2
2.1
3.2
4.1
2.4
3.3
0.5
-5.4
14.3
-10.8
77.7
-8.1
1.8
10.5
0.4
61.5

a

b

Fiscal Balance (% of GDP)b
Debt (% of GDP)b
Primary Balance (% of GDP)c,dLower middle-income poverty rate ($3.2 in 2011 PPP)c,dUpper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-14.9
-18.6
-1.2
-26.1
-38.1
-28.9
-14.7
-2.5
-19.1
-14.3
2.5
-12.5
26.0
-19.9
100.6
-17.0
2.7
15.8
-12.9
62.1

2021e
3.9
6.3
2.9
19.0
-1.4
5.9
3.9
6.6
13.2
1.4
4.0
-11.1
31.9
-9.8
103.7
-7.4
2.4
14.5
7.5
61.2

2022f
5.9
2.0
1.4
3.8
32.0
12.3
5.9
1.5
1.7
7.3
8.4
-14.2
32.5
-6.3
103.2
-3.9
2.2
12.9
5.7
61.5

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
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: 2018-2021. Forecasts are from 2022 to 2024.
d/ Projection using neutral distribution (2017) with pass-through = 0.87 based on GDP per capita in constant LCU.

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2023f
6.0
2.0
2.9
5.7
12.7
2.5
6.0
3.8
3.3
6.9
5.7
-10.4
32.3
-7.1
99.0
-4.7
2.0
11.1
4.5
61.4

2024f
3.9
2.2
2.9
4.7
7.0
2.6
3.9
1.8
1.3
4.7
5.0
-9.3
33.1
-6.2
97.5
-4.0
1.8
10.0
6.5
61.9

MOZAMBIQUE
Table 1

Key conditions andchallenges

2021

Population, million

32.2

GDP, current US$ billion

16.1

GDP per capita, current US$

500.0

International poverty rate ($1.9)

a

63.7

Lower middle-income poverty rate ($3.2)
Gini index

a

a

82.4
54.0

School enrollment, primary (% gross)

b

118.4

b

60.9

Total GHG Emissions (mtCO2e)

112.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Mozambique’s economy recovered moderately in 2021. Growth reached 2.2 percent, driven by agriculture and a gradualrebound in demand. Yet, the poverty rate
remains high at 63.5 percent as per capita
income declined. The medium-term outlook is positive with growth projected toreach 6 percent in 2023, largely reflecting
the start of LNG production. However,considerable uncertainties remain, including from the pandemic, insurgency inthe north, and natural disasters.

The economy was already weak when it
entered the pandemic. Growth plunged
from 8 percent in 1993–2015, to 3 percent
in 2016–2019, due to the hidden debt crisis in 2016, the insurgency escalation in
Northern Mozambique, and the cyclones
in 2019. In 2020, COVID-19 led to a GDP
contraction of 1.2 percent, as demand felland liquified natural gas (LNG) investments were delayed. The pandemic exacerbated pre-existing vulnerabilities stemming from overreliance on large investments in the extractive industry and exports of commodities, with weak domestic linkages. The private sector’s potential
remains untapped due to weak governance, a difficult business environment,
and infrastructure and human capital
deficits. Structural transformation has
been limited with most jobs remaining in
low productivity activities. Despite considerable
downsiderisks—including
COVID-19, natural disasters, and insurgency— economic prospects remain positive. Growth is projected to average 5
percent in 2022-2024, driven by developments in the LNG sector. The poverty
rate is expected to fall marginally from
63.2 to 61.1 percent between 2022 and2024, but the number of poor will increase by some 600,000 people due torapid population growth.
Mozambique needs to capitalize on thegains from the economic recovery to

promote inclusive growth. Achieving
this requires, among others, investments
in infrastructure and social sectors, but
the country faces substantial fiscal constraints. The public sector wage bill anddebt service absorb about 90 percent
of total tax revenues. In addition, significant fiscal revenues from the LNG
sector may materialize only in about adecade. Mobilizing additional financing
needs involve: (i) resuming fiscal consolidation, notably through wage bill reforms; (ii) increasing public spending efficiency; (iii) improving debt management and bringing public debt back tomore sustainable levels; and (iv) greater
private sector development.

Recent developments
Growth reached 2.2 percent in 2021, driven by increased agricultural and services output. The resumption of mobility
supported the recovery of private consumption. The global recovery impacted
food, energy, and fuel prices, contributing to a rise in inflation to 5.7 percent in
2021, double the rate registered in 2020.
The loss of income and employment due
to the pandemic meant that the poverty rate remained unchanged at 63.5 percent in 2021, but the number of poor increased by 650,000, totaling 20.4 million
as of end-2021.
Although revenues held up well in 2021,
fiscal pressures persisted. The overall fiscal
deficit declined to an estimated 4.8 percent
of GDP in 2021, down from 5.7 percent in

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
8%

Poverty rate (%)

Real GDP per capita (constant LCU)

100

25000

90

6%

80

4%

20000

70
60

2%

15000

50

0%

40

10000

30

-2%

20

5000

10

-4%

0

0
2008 2010 2012 2014 2016 2018 2020 2022 2024

Agriculture
Services

Extractives
Tax

Manufacturing
GDP

International poverty rate
Real GDP pc

Source: World Bank.

Source: World Bank. Notes: see Table 2.

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62

Apr 22Lower middle-income pov. rate

2020. Despite the pressures from COVIDrelated as well as humanitarian and security spending, total public expenditure fell
to 31.6 percent of GDP in 2021 (from 33.6
percent in 2020). This was driven by lower
debt service, reflecting currency appreciation and debt service deferral under the
DSSI. Total public debt dropped from 125
to 117 percent of GDP in 2021, largely due
to the currency appreciation. Mozambiqueis in debt distress with debt assessed to besustainable in a forward-looking sense.
Recovering trade and delayed implementation of LNG projects have led to a stable current account deficit (CAD). The
CAD declined from 25.7 to 22 percent of
GDP between 2020 and 2021. The drop
was mainly driven by lower imports ofservices, due to the delays in LNG projects. Total exports—mainly coal and aluminum—grew by 55 percent, following adecline of 23 percent in 2020. The CAD
was mostly financed by FDI and, to someextent, private borrowing. FDI was considerably high at US$ 5.1billion (against
US$ 3 billion in 2020), surpassing prepandemic levels. As a result of these developments, net external reserves closed

at US$3.2 billion (equivalent to 6-7
months of imports, excluding megaprojects) in November of 2021—representing
a drop of 14 percent (y-o-y).

Outlook
Growth is projected at 3.6 percent in 2022,
before peaking at 6 percent in 2023. The
start of LNG production at the Coral South
offshore is expected to boost exports. Agricultural output growth is expected to remain considerable, given favorable weather conditions, and services activities willcontinue to steadily recover. Inflationarypressures will remain substantial as fueland food prices continue to increase.
Nonetheless, inflation is projected to remain within single digit in the mediumterm, supported by a conservative monetary policy and a stable exchange rate.
Poverty is expected to remain over 63 percent in 2022, despite the growth recovery
and increased social transfers.
Fiscal pressures are likely to persist. The
deficit is projected at 6.3 percent in 2022

TABLE 2 Mozambique / Macro poverty outlook indicators

but expected to decline to 3.6 percent of
GDP over 2023–2024, partly driven by alower wage bill. Structural reforms, including streamlined salary and career structures, and fiscal consolidation measuresare expected to reduce wage bill pressures.
Revenue is projected to perform well as the
economy recovers. Despite this, financing
needs will remain substantial in 2022-2024,
due to high debt service and short-term
cost of wage bill reforms.
The CAD is expected to reach 32.5 percent of GDP in 2022, and stay close to 40
percent in 2023-2024 owing to increased
imports of services and machinery for
LNG development. Further, the push in
fuel, and wheat will add extra US$ 300
million to total imports. However, exports
are set to grow significantly as LNG production begins and commodity prices recover. The external financing gap will
be covered by FDI inflows and externalloans, mainly for LNG investments. These
FDI inflows, combined with the anticipated World Bank DPF and the IMF program, will allow external reserves to remain at comfortable levels.

(annual percent change unless indicated otherwise)
2019
2.3
3.1
3.6
-0.6
-9.5
-1.5
1.8
1.3
-0.4
2.9
2.8
-19.6
14.4
-0.5
107.5
2.7
61.9
81.1
0.9
8.0

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)a

Fiscal Balance (% of GDP)
Debt (% of GDP)a
Primary Balance (% of GDP)b,cInternational poverty rate ($1.9 in 2011 PPP)b,cLower middle-income poverty rate ($3.2 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.2
-2.1
-19.3
60.1
-15.0
-0.4
-1.9
3.1
-5.8
-2.7
3.1
-25.7
16.7
-5.7
125.3
-2.3
63.3
82.2
0.7
8.3

2021e
2.2
18.1
-5.8
36.1
24.1
40.7
2.2
3.4
1.3
2.0
5.7
-22.1
31.8
-4.8
117.4
-1.1
63.5
82.3
0.3
8.0

2022f
3.6
0.3
10.5
-0.9
9.6
2.1
3.6
3.5
3.6
3.7
6.4
-32.5
22.2
-6.3
120.0
-2.4
63.2
82.1
1.1
8.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Figure includes once-off capital gains revenues in 2017, estimated at 2.7 percent of GDP.
b/ Calculations based on 2014-IOF. Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024.
c/ Projection using neutral distribution (2014) with pass-through = 0.87 based on GDP per capita in constant LCU.

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63

Apr 22

2023f
6.0
7.6
-18.7
3.8
15.1
3.5
6.0
1.2
14.9
5.1
5.5
-39.0
20.6
-3.7
113.5
0.1
62.2
81.4
1.7
8.7

2024f
5.8
3.7
-7.5
6.8
6.4
2.5
5.8
5.8
5.8
5.7
5.5
-42.0
19.1
-3.5
104.1
0.8
61.1
80.6
1.5
9.1

NAMIBIA

Key conditions andchallenges

Table 1

2021

Population, million

2.6

GDP, current US$ billion

12.4

GDP per capita, current US$

4794.1

International poverty rate ($1.9)

a

13.8
a

30.3

a

51.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

59.1

School enrollment, primary (% gross)

b

124.2

b

63.7

Total GHG Emissions (mtCO2e)

22.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

Namibia’s growth rebound in 2021 is estimated to have been weaker than expected. The outlook for 2022 is favorable
boosted by an improved pandemic situation and strong prospects for the mining
sector. The protracted effects of the pandemic have left significant scarring in theeconomy, worsening socio-economic indicators. The projected upper middle-income poverty rate remains high at 65 percent for 2021 while employment is estimated to be below pre-pandemic levels.

Namibia’s growth challenge predated the
COVID-19 crisis. In the decade leading up
to 2015, economic growth averaged nearly
5 percent annually boosted by investments
in mineral extraction, a boom in exports
and government spending. The period
from 2016 onwards has mostly beenmarked by recession. Pre-pandemic, fiscal
retrenchment, weak export prices, completion of major investment projects and poor
growth in key trade partners brought
growth to a halt. In real terms, GDP per
capita has contracted since 2016, with corresponding projected poverty increases.
Weak demand and skills mismatches haveconstrained job creation with the unemployment rate averaging above 20 percent
since 2016. With persisting labor market
challenges, Namibia remains one of themost unequal countries in the world.
Global and regional developments are an
important driver of Namibia’s fiscal andexternal positions as the country is highly
reliant on commodity exports and SACU
transfers. Volatility in prices of Namibia’s
exports, particularly diamonds and uranium, present risks. While Namibia enjoyed good rains in 2021, the country is
amongst the driest in the world and severe drought is a persistent threat for economic performance and for the welfare ofpoor subsistence farmers.
Raising productivity, including through reforms to improve the business environment

FIGURE 1 Namibia / Budget balance and SACU revenues

Percent of GDP0

and foster job-rich growth, is critical to reverse the trend of declining potential output. In the long term, progress in theplanned development of a green hydrogensector carries significant upside potential
for the economy. Short-term risks to
Namibia’s recovery are dominated by pandemic uncertainties, amid relatively low
vaccine coverage, and evolving effects of
the war in Ukraine.

Recent developments
Mainly driven by a rebound in private
consumption, the economy is estimated tohave expanded by 0.8 percent in 2021 following the historic contraction of -8.5 in
2020. The economic rebound was weaker than projected in October 2021 due toa marked deterioration in the net exportbalance. Exports contracted further andimports rebounded. The supply side assessment suggests that the tertiary sector underpinned growth in 2021, comingfrom depressed levels in the prior year,
while industry output contracted, led bydeclines in construction activity and electricity generation. Tight COVID-19 restrictions were in place during parts of
the year to manage surges in infections.
The protracted effects of the pandemic
have left significant scarring in the economy, worsening socio-economic indicators. Given the sluggish economic expansion, the projected upper middle-income
poverty rate remained high at 65 percent
while employment is estimated to be well
below pre-pandemic levels.

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

Percent of GDP
6

Real GDP per capita (constant LCU)

80

70000

7

70

60000

8

60

-4

9

50

-5

10

40

-6

11

30

-1
-2
-3

-7

-9

13

-10

14
2016
2017
Budget deficit

40000
30000
20000

20

12

-8

50000

10000

10
0

0
2009

2018
2019
2020
2021e
Taxes on international trade, SACU (rhs)

Sources: Ministry of Finance, Central Bank and World Bank staff estimates.

2011

2013

2015

2017

64

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: See table 2.

MPO

2019

Namibia experienced a deterioration of
its current account balance to an estimated deficit of 8 percent of GDP in 2021
from an atypical surplus of 3.3 percent of
GDP in 2020, while being able to maintain an adequate level of international reserves. The weaker external balance wasdue to lower mineral exports, a decrease
in SACU receipts, investment income outflows, and an increase in imports thathas been fueled by rebounding domestic demand. Thanks to significant financial inflows from International Financial
Institutions, gross reserves increased from
US$2.2 billion at end-2020 to US$2.8 billion at end-2021 (representing about 5.5
months of imports).
Amid the limited growth rebound, thefiscal position deteriorated with the budget deficit increasing to 8.8 percent of
GDP in 2021 (from 8.2 percent in 2020),
and public debt (including guarantees)
further rising to 75.3 percent of GDP from69.2 percent in 2020. The wider deficit
was on the back of lower SACU revenues,
which fell from 12.5 percent of GDP in
FY2020 to 7.9 percent of GDP in FY2021.
Namibia redeemed its Eurobond whichmatured in November 2021, limiting therise in debt levels.
Monetary policy remained accommodative and aligned with the SARB. The policy
rate was unchanged at 3.75 percent
through 2021, before the Bank of Namibia
hiked by 25 basis points in February 2022.
Inflation remained contained in 2021, averaging 3.6 percent.

OutlookNamibia’s economic performance is expected to improve in 2022-23, premised on
waning effects of the pandemic and strong
prospects for the mining sector. GDP
growth is projected to accelerate to 2.9 percent in 2022. Diamond output, in particular, is expected to increase as the new Debmarine vessel begins operating and the lifeof mines that were previously slated toclose is extended. The new diamond recovery vessel is expected to boost production by at least a third. Activity in the mining sector is broadly expected to find support from firm global commodity prices.

TABLE 2 Namibia / Macro poverty outlook indicators

So long as the effects of the conflict in
Ukraine last, higher mineral prices will
benefit Namibia’s terms of trade but the related oil price shock will raise the importbill and inflationary pressures.
Government consumption is expected to
be a drag on growth over the medium
term given fiscal consolidation. Authorities remain committed to restoring fiscal
sustainability over the MTEF period, although the speed of consolidation will
depend on recovery in revenues. Monetary policy normalization is expected tocontinue at a prudent pace, driven by theexchange rate peg with the rand. As mining exports rebound and SACU receipts
increase from next year, the current account deficit is expected to narrow gradually over the medium term and projected at 6.3 percent of GDP in 2022.
The trajectory of the pandemic globally is
an intractable risk to the outlook while
the projected growth path is insufficientto address socio-economic challenges.
Poverty is projected to remain high at 64
percent (US$5.50 line, 2011 PPP) in 2022
due to weak per capita GDP growth andslow job creation.

(annual percent change unless indicated otherwise)
2019
-0.9
0.4
1.5
-8.9
-9.0
-3.4
-0.2
-3.2
-2.3
1.1
3.7
-1.8
-1.5
-5.3
62.8
-1.4
16.7
35.8
56.8
-1.1
19.9

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)a
Debt (% of GDP)
Primary Balance (% of GDP)b,cInternational poverty rate ($1.9 in 2011 PPP)b,cLower middle-income poverty rate ($3.2 in 2011 PPP)b,cUpper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-8.5
-10.3
-1.5
-11.2
-17.7
-14.7
-7.1
6.1
-13.7
-5.7
2.2
3.3
-2.0
-8.2
69.2
-3.8
20.8
43.5
64.5
0.0
19.3

2021e
0.8
11.9
0.5
-8.8
-9.8
8.0
0.5
-0.1
-2.9
1.9
3.6
-8.0
2.3
-8.8
75.3
-4.3
21.3
44.4
65.3
-0.1
19.2

2022f
2.9
3.3
-0.6
5.0
13.1
6.9
2.9
2.0
7.2
1.4
5.2
-6.3
1.6
-7.4
79.5
-2.6
20.8
43.4
64.4
1.5
19.5

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Refers to Public and Publicly Guaranteed debtb/ Calculations based on 2009-NHIES and 2015-NHIES. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
c/ Projection using annualized elasticity (2009-2015) with pass-through = 1 based on GDP per capita in constant LCU.

MPO

65

Apr 22

2023f
2.1
3.0
-0.1
4.3
6.0
5.1
2.1
2.0
2.1
2.1
4.5
-4.5
1.6
-6.2
81.5
-1.1
20.6
43.1
64.1
1.5
19.9

2024f
2.0
3.0
-0.2
4.7
3.5
4.0
2.0
2.0
2.5
1.7
4.5
-3.8
1.9
-5.4
83.6
-0.4
20.5
42.9
63.9
0.3
19.7

NIGERKey conditions andchallenges

Table 1

2021

Population, million

25.1

GDP, current US$ billion

14.3

GDP per capita, current US$

569.8

International poverty rate ($1.9)

a

41.4
a

75.2

a

91.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

37.3

School enrollment, primary (% gross)

b

66.4

b

62.4

Total GHG Emissions (mtCO2e)52.3Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ Most recent WDI value (2019).

Niger avoided recession in 2020, but therecovery was interrupted in 2021 withgrowth falling to 1.4 percent (-2.3 percent
per capita), due to heightened insecurity
and climatic shocks (drought, erratic
rains and flash floods) that significantly
reduced agricultural output. Consequently, extreme poverty increased to 41.8 percent in 2021. While the outlook remains
positive, with oil revenues coming onstream in 2024, significant downside
risks require a strong reform effort.

Despite robust GDP growth (averaging 6.2
percent annually over 2010-2019), the levelof per capita GDP (US$ 554 in current
prices) in 2019 remains well below regional
peers. High demographic growth is themain drag to a more sustained increase in
per capita incomes.
Niger needs to address at least two key factors to reduce its structural fragility and sustain a higher pace of economic growth. First,
Niger needs to better adapt to climaticchanges as 75 percent of the workforce isstill in subsistence agriculture and volatile
climatic conditions have led to large agricultural production fluctuations (as highlighted by the collapse of production in 2021)
and food insecurity. Second, Niger needs toaddress domestic insecurity and regional
instability, which impact Niger’s overall
economic performance, public finances,service delivery and access to markets.
With relative political stability in a turbulent region, Niger is relatively well positioned to adopt structural reforms that
lay the foundations for more inclusive
and resilient economic growth. Reforms
need to increase overall productivity (especially in agriculture) by strengthening
economic governance, promoting financial inclusion, adopting digital technologies, and broadening access to educationand training to support waged jobs creation. Accelerating crisis preparedness
through climate adaptation investments,

a stronger disasters management framework, and robust social safety nets, arealso key to increase resilience to natural
shocks. Supporting demographic transition by reducing large gender gaps also
needs to be a central piece of Niger’s
development strategy, while the pace ofvaccination for COVID-19 needs to accelerate to reach the target of 42 percent of
the population.

Recent developments
The pace of economic growth came to asudden halt in 2021, falling to 1.4 percent
from 3.6 percent in 2020 due to the collapseof cereal production (-38 percent), causedby drought in September, crop infestation,and insecurity. This agricultural production shock left more than 2.5 million people food insecure.
The fiscal deficit remained high, at 6.6
percent of GDP, in 2021 due to the increase in spending to support the recovery and to address security and food insecurity issues, for example by strengthening food for work, school feeding, or
cereal distribution programs. As a resultof lower growth and the higher deficit,
public debt is projected to have reached52.3 percent of GDP in 2021, and therisk of debt distress is assessed as moderate. The current account deficit (CAD)
is estimated to have widened to 14.9
percent of GDP in 2021, driven by adeterioration of the trade balance amid
high oil and gas projects-related imports
and higher food import prices.

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

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

Percent, percentage points
12

Poverty rate (%)

Real GDP per capita (constant LCU)

120

40000010350000100

8300000680

425000060200000

2
0

40

-2

20

-4

150000100000

2019

2020
2021
Agriculture
Services
Actual GDP growth

2022

2023
Industry
Net Taxes

2024

50000

0

0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Sources: INSN and World Bank staff estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Note: See table 2.

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66

Apr 22

Inflationary pressures persisted, fueled byrising food prices (7.8 percent), particularly cereals (16.8 percent). Average annual inflation reached 3.8 percent for 2021.
Niger’s monetary and exchange rate policies are managed by the BCEAO, which
maintains a fixed peg between the CFA
Franc and the Euro. Its reserves reached
5.8 months of imports of goods and services in 2021, as a result of the recovery
in export repatriation proceeds, the August 2021 SDR allocation, and portfolio
inflows linked to Eurobond issuances in
the region.
The 2.3 percent decline in per capita GDP
in 2021 resulted in an increase of 1.4 percentage point in the international extreme
poverty rate (US$1.90/day per capita, 2011
PPP) to 41.8 percent in 2021. As a result,the number of extreme poor rose from 9.8
million to 10.5 million. Data from high frequency phone surveys indicated that 40
percent of households experienced an income loss during the pandemic. Furthermore, higher food inflation would have
impacted poor households as 40 percent of

Nigerien households are net food buyers
and food represent 58 percent of their consumption basket.

Outlook
Amidst high uncertainty, economic
growth in 2022 is projected at 5.2 percent.
This forecast hinges upon several positive
developments, particularly the absence of
new climatic shocks, and on an improvement in the security situation. Over the
medium term, growth is expected to surpass 10 percent in 2024 due to the start ofoil production. Inflation is set to overshootthe standard 3 percent target again in 2022,
driven by higher food and energy prices.
An ambitious fiscal adjustment supportedby the IMF program, aimed at reducing the
deficit from 5.5 percent of GDP in 2022, toaround 3 percent in 2024, would put thedebt-to-GDP ratio onto a declining path.
Extreme poverty is expected to decline to41.0 percent in 2022 as growth, particularly

TABLE 2 Niger / Macro poverty outlook indicatorsin agriculture improves. However, in orderto achieve a reduction in the absolute number of poor, annual GDP growth must be
significantly above Niger’s projected highpopulation growth rate of 3.8 percent during the period 2022-2024, and the rents
from the petroleum sector must be broadly
shared through proactive government
policies for inclusive growth.
The GDP growth outlook is subject to ahigh degree of uncertainty and multiple
downside risks, including intensified security risks, further climatic-shocks, continuing food security challenges, local COVID
outbreaks, and widespread social discontent from food inflation and insecurity. It is
likely that at least one/some of these risks
will materialize and concurrent shocks are
possible. The economic consequences of
the Russia-Ukraine war are a further
source of risk, primarily through higher
global food (grains/fertilizer) and energy
prices. The projections already reflect recent sharp increases in oil and gas, agriculture and metal and mineral prices since
January 2022.

(annual percent change unless indicated otherwise)
2019
5.9
3.7
8.1
13.6
1.1
6.2
6.1
3.4
9.0
7.0
-2.5
-12.2
5.3
-3.6
39.8
-2.6
40.3
74.3
91.5
4.8
14.8

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
3.6
4.4
3.7
4.9
-6.3
2.7
4.2
7.7
1.7
2.3
2.8
-13.2
2.5
-5.4
45.0
-4.4
40.4
74.5
91.5
3.8
14.6

2021e
1.4
-1.5
2.0
9.1
3.6
3.5
1.1
-7.9
5.4
7.7
3.8
-14.9
4.6
-6.6
52.5
-5.5
41.8
75.5
91.9
3.9
14.6

2022f
5.2
5.1
7.6
5.4
5.5
6.8
5.1
5.0
6.4
4.4
3.5
-16.9
5.2
-5.5
53.0
-4.1
41.0
74.8
91.6
4.3
14.9

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

67

Apr 22

2023f
7.1
5.9
13.0
6.0
20.8
11.1
7.1
6.1
7.9
7.6
3.0
-15.5
3.5
-4.5
52.2
-3.1
38.7
73.5
91.1
4.8
15.5

2024f
10.4
6.7
12.1
6.5
41.7
11.0
10.4
6.2
20.0
8.5
3.0
-12.2
2.8
-3.2
48.7
-2.1
34.8
70.4
89.9
5.3
16.5

NIGERIA

Key conditions andchallenges

Table 1

2021

Population, million

211.4

GDP, current US$ billion

488.6

GDP per capita, current US$

2311.1

International poverty rate ($1.9)

a

39.1
a

71.0

a

92.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

35.1

School enrollment, primary (% gross)

b

87.5

b

54.7

Total GHG Emissions (mtCO2e)

387.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2018); Life expectancy(2019).

Nigeria’s real GDP is expected to growby 3.8 percent in 2022. Nevertheless, given high population growth and stagnant
poverty reduction, the number of Nigerians living below the international poverty
line is projected to rise by 2.5 million between 2021 and 2024. Nigeria’s growth
outlook remains uncertain due to the war
in Ukraine and its impact on the global
economy. Macroeconomic and businessclimate reforms will be necessary to ensure a sustained recovery beyond the baseeffects seen in 2021.

After two decades of uneven growth,
poverty in Nigeria remains widespread,affecting around 4 in 10 Nigerians. Nigeria
grew rapidly between 2000 and 2014 (average of 7 percent per year), but the
2014-2015 collapse in global oil prices, a reversal in macroeconomic reforms, and thefall in domestic non-oil production led toa cycle of sluggish growth. Subsequently,
economic growth has been muted at 1.1
percent, on average, in 2015–21, below therate of population growth of 2.6 percent.
Nigeria’s fiscal position has been deteriorating since 2015, mainly due to low anddeclining oil revenues (50 percent of consolidated revenues come from oil) and rising expenditures, resulting in fiscal deficits
averaging 5.4 percent of GDP in 2020-21.
After the 2015-16 recession, Nigeria’s already low level of general government revenue fell and averaged 7.0 percent of GDP
between 2016 and 2020, the second lowest
globally. As a result, general government
expenditure remains low.
In the short term, recouping the welfare
and human capital losses incurred during
the COVID-19 pandemic remains vital. To
this end, the authorities should consider
three policy priorities. First, a fast and equitable vaccine rollout is still needed totackle the virus’ direct health effects. Second, reversing learning losses from school
closures can mitigate long-term effects onhuman capital. Finally, social protection,

which remains scant, should be expanded
to offset income losses and prevent households from falling into—or further into—poverty.
In the medium term, the government must
adopt reforms to sustain Nigeria’s economic recovery. These include merging its
multiple exchange rates, reducing trade restrictions, improving the business climate,
and reducing the monetization of the fiscal
deficit. In addition, diversifying the economy, especially reducing the dependenceof revenues on oil, is essential to build resilience against future shocks, create productive jobs, and reduce poverty.

Recent developments
GDP grew by 3.6 percent in 2021, exceeding population growth for the first timesince 2015, led by base effects in most sectors and organic growth in agriculture,telecommunications, and financial services. Oil production, however, continued
to decline and reached a two-decade low
due to inefficiencies and insecurity.
Inflation remains high in Nigeria, reaching 15.6 percent, year-on-year, in January2022—above the average of the last 4
years and one of the highest in Sub-Saharan Africa. Inflation has been driven
by higher prices of staples, which are especially reducing the purchasing powerof poor and vulnerable Nigerians, constraining any potential poverty reduction.
Nigerian authorities have not taken any
recent concerted actions to tackle inflationary pressures.

FIGURE 1 Nigeria / Oil price shock transmission channels

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

Percent GDP, percent growth20

Poverty rate (%)

15

US$/bbl110
90

Oil price (US$/bbl)

90

390000380000

70

50
30

5

4000008070
10Real GDP per capita (constant LCU)

100

60

37000050

36000040

35000030

Revenues (% GDP)GDP growth (%)

3400002010330000

10

0
-10
-5

0

3200002010-30
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sources: WDI, NBS, and World Bank.

2012

2014

2016

2018

68

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2020

The government’s fiscal position typically
improves when oil prices rise, but thiswas not the case in 2021 when the consolidated fiscal deficit remained above 5.0
percent of GDP. Nigeria has not beenable to fully benefit from the current priceboom because: (i) oil production declined
in 2021; and (ii) the domestic price of
petrol remained fixed while global petrol
prices rose, increasing the cost of the Premium Motor Spirit (PMS) subsidy. The
PMS subsidy disproportionately benefits
richer Nigerians and imposes a massive
and unsustainable fiscal burden. Its costrose from 4 to 35 percent of oil and gas
revenues in 2021 (US$4.5 billion, roughly
1 percent of GDP).
Buoyed by rising oil prices and improved
remittance inflows, Nigeria’s external position improved in 2021. The current account balance improved from -2.4 percent
of GDP in 2020 to 2.0 percent of GDP in
2021. Despite the central bank taking steps
to merge its multiple exchange rates byadopting the Importer and Exporter FX
window rate as its official rate in May 2021,
the parallel rate premium increased to 37
percent of the official rate in 2021.

Outlook
Nigeria’s GDP growth is projected at 3.8
percent in 2022, driven by growth in theservices, trade, agriculture, and construction sectors as well as a recovery in oil production. Yet, GDP per capita at end-2022
is expected to be below the level recorded
in 2014, and it is not expected to return topre-COVID-19 levels before 2027.
The impact of the pandemic on poverty
could linger. Combining the effects of
the COVID-19 crisis and high population growth, the number of Nigerians
living in extreme poverty (measured using the international poverty line of
US$1.90 per day, 2011 PPP) could riseby 10 million between 2019 and 2024,with the absolute number of poor people reaching 89 million by 2024. Whilethese forecasts are slightly rosier thanthe World Bank fall forecasts, they still
paint a sobering picture of Nigeria’s
prospects for poverty reduction.
The country’s economic outlook remains
highly uncertain. The projected recovery

TABLE 2 Nigeria / Macro poverty outlook indicators

can be threatened by: (i) the impact of
the Russia-Ukraine conflict on the global
economy through lower capital flows,
heightened uncertainty, higher prices ofimported food and inputs for fertilizers,
lower global growth, and volatile oil
prices; (ii) lower-than-expected oil production due to technical inefficiencies;(iii) heightened insecurity; (iv) higher uncertainty on policy direction arising fromthe upcoming February 2023 generalelections; and (v) worsening fiscal risks
related to the PMS subsidy deductions.
Even in the most favorable global context, the policy response of Nigeria’s authorities will be crucial to lay the foundation for a robust recovery. The authorities can boost growth by strengthening macroeconomic reform efforts, including measures aimed at: (a) adopting
a more flexible and transparent foreignexchange management regime; (b) accelerating revenue-based fiscal consolidation; (c) strengthening expenditure anddebt management; and (d) improving thebusiness climate.

(annual percent change unless indicated otherwise)
2019
2.2
-2.4
15.0
11.8
15.0
27.3
2.3
2.4
2.3
2.2
11.4
-3.8
0.4
-4.6
21.7
-2.6
39.3
71.1
92.1
3.1
39.3

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-1.8
1.3
13.6
19.0
-32.2
-23.5
-1.9
2.2
-5.9
-2.2
13.2
-2.4
0.2
-5.8
25.2
-4.1
41.1
72.6
92.8
1.1
38.1

2021e
3.6
0.2
-1.1
8.5
10.4
3.5
3.7
2.1
-0.2
6.0
17.0
2.0
0.6
-5.8
29.6
-3.6
40.7
72.3
92.6
3.9
38.0

2022f
3.8
2.4
4.8
3.2
8.5
5.5
3.8
2.7
4.5
4.1
14.8
5.8
0.5
-5.1
29.6
-2.6
40.2
71.9
92.4
4.0
37.8

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-LSS.Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

69

Apr 22

2023f
4.0
2.6
0.4
5.2
7.5
4.3
4.0
2.7
5.1
4.1
13.0
4.9
0.4
-4.9
30.4
-2.4
39.6
71.4
92.1
4.4
37.9

2024f
4.0
2.9
7.5
7.9
5.0
9.0
4.1
3.0
3.5
4.8
11.0
3.2
0.4
-5.3
31.7
-2.4
38.9
70.8
91.9
4.6
38.0

RWANDAKey conditions andchallenges

Table 1

2021

Population, million

13.3

GDP, current US$ billion

11.0

GDP per capita, current US$

828.7

International poverty rate ($1.9)

a

56.5
a

80.3

a

91.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

43.7

School enrollment, primary (% gross)

b

131.3

b

69.0

Total GHG Emissions (mtCO2e)

8.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2011 PPPs.
b/ Most recent WDI value (2019).

Rwanda’s economy grew at around 11
percent in 2021, as targeted measures
helped economic activities to effectively
navigate the pandemic. The twin deficits
remained—requiring more external financing—and are expected to ease below
their pre-crisis levels in 2022–2024. Despite an unprecedented assistance program, poverty likely increased due to theadverse effects of the pandemic on output
and employment, but is expected to return to pre-crisis levels in 2022.

Despite exceptional economic performance in recent decades, including rapid
growth in per capita income over
2005–2019, Rwanda faces major development challenges. Poverty rates (measured
as US$1.90 a day) fell from 69.1 percent
in 2005 to 56.5 percent in 2017 and wasprojected to fall even further to 52.9 percent in 2019 behind strong growth in GDP
and private consumption. With the emergence of COVID-19, poverty is expected
to have increased to 56.0 percent for 2020.
Rwanda has relatively higher poverty rates
than African peers with similar income percapita, and poverty reduction has becomeless responsive to growth in recent years.
Rwanda now faces challenges in fullytranslating its strong growth into commensurate gains in poverty reduction andshared prosperity, with the aim of eliminating poverty by 2050.
A shift from public investment-led growth
to the private sector is key to Rwanda’s aspiration of becoming an upper-middle income country by 2035 and a high-income
country by 2050. Capital accumulation,
mostly large-scale public investment in infrastructure, has been the main driver ofgrowth. Limitations of the state-led development model have become apparent. Labor productivity and total factor productivity are low for its income level. Moreover, the private sector still maintains a relatively limited presence, restricted in partby high costs of finance, energy, and transport, coupled with dominance of SOEs.
Key reforms should aim to enable competitive domestic enterprises, foster innovation, develop long-term finance, and foster
regional integration.

Recent developments
Effective vaccination measures helped
Rwanda navigate the pandemic. After
grappling with the third—and more severe—wave in June–August 2021, Rwanda successfully contained the spread of
infections while continuing its vaccination
campaign. By end-February, about 68 percent of the total population had received
at least one dose of COVID vaccine, while
60 percent had received two doses. These
vaccination rates place Rwanda among
the top ten countries in Africa. Rwanda
started administrating a booster shot dosein December 2021.
The economy surged in 2021, growing by
about 11 percent. Gradually easing mobility restrictions have supported a broadbased rebound, stimulating private consumption, by increasing incomes amid thereopening of economic activities, andfalling inflation. Household consumption
made significant contribution to growth,thanks to government transfers rolled out
to households affected by the pandemic.
Government investment spending contributed significantly, accounting for onethird of GDP growth. However, unemployment continued to be higher relative
to the pre-crisis levels as firms were not yet

FIGURE 1 Rwanda / Primary deficit, interest payments, andpublic debt

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

Percent of GDP
16

Poverty rate (%)

Real private consumption per capita (constant LCU)

100

70000090

1260000080

87050000060

40000050

4403000003020000020

0100000

10
0

-4
2016

2017 2018 2019
Primary deficit

2020 2021
Interest

0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

2022 2023 2024
Change in debt

Source: World Bank.

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

70

Apr 22confident about the recovery sustainability
and did not hire permanent employees. In
August 2021, the unemployment rate wasmore than 3 percentage points higher thanin August 2019.
The authorities have maintained a fiscal
expansion to support the recovery amid
rising revenues. Total government revenues (including grants) peaked in 2021,
estimated at 25.5 percent of GDP, up from
23.6 percent in 2020. Government outlays
also increased, reaching 33.3 percent of
GDP in 2021, compared to 32.9 percent in
2020, driven mainly by continued fiscal
support for firms and households affectedby the pandemic. The government fasttracked a US$250 million package to support private investments in manufacturing
and construction. The overall fiscal deficit
eased to 8.2 percent of GDP in 2021, compared to 10.3 percent of GDP in 2020, as
Rwanda continued to benefit from large
external COVID-related support.
Driven mainly by rising prices of fresh
food and energy products, annual urban
inflation rose to 5.8 percent in February
and is expected to remain high in 2022.
In expectation of higher inflationary pressures from higher international commodities, the National Bank of Rwanda raised
the policy interest rate by 50 basis points(to 5 percent) in mid-February 2022, while
continuing to support the recovery.

Outlook
Short- to medium-term growth prospectsof Rwanda’s economy are positive but conditional on continued national vaccination,
recovery of the domestic economy, as wellas the economic consequences of the Russian invasion in Ukraine. Energy and commodity prices (especially wheat) have
surged, adding to inflationary pressuresfrom supply chain disruptions and hobbling the rebound from the COVID-19
pandemic. While the economic consequences of the Russian invasion, war, andassociated sanctions are still unfolding,
Rwanda’s GDP growth is likely to be lower
than expected in 2022. Commodity prices
and fiscal subsidies are expected to be themain channels of the crisis. Even thoughpoverty is expected to return to pre-crisis
levels in 2022 behind expected increases
in household consumption, large increases
in food prices have the potential to delay
or even revert these poverty gains. With
eased COVID-19 restrictions, domestic demand and trade are expected to gradually

TABLE 2 Rwanda / Macro poverty outlook indicators

improve, raising GDP growth to around
7 percent over 2022–2024, a lower growthtrajectory than before the pandemic.
Rwanda is likely to reach its pre-pandemic
trend on its real per capita US$ GDP by
2023. The pace of national vaccination
should be kept up to ensure that 70 percentof the population 12 years and above is fully vaccinated by mid-2022.
The fiscal deficit is expected to remain elevated at around 7.4 percent of GDP in 2022
before gradually declining as revenues recover and emergency spending subsides.
The deficit is projected to narrow to about
4 percent of GDP in 2024 in line with government commitments. Public debt is forecast to peak in 2023 (Table 2), but Rwanda
remains susceptible to external shocks togrowth and/or exports, and worse-thanexpected external financing conditions,which can be aggravated by a prolonged
pandemic and uneven recovery. Rwanda
needs to identify credible revenue andspending measures for a growth-friendly
fiscal consolidation with a view to reaching their debt anchor within a reasonable
timeframe and further strengthening theirdebt management capacity. However,higher interest payments could put pressure on fiscal space in the medium-term,
absent revenue reforms.

(annual percent change unless indicated otherwise)
2019
9.5
5.5
17.5
32.1
19.9
18.0
8.9
5.0
16.6
8.3
2.4
-11.9
2.5
-9.2
56.8
-7.7
52.9
78.1
91.1
2.8
26.1

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-3.4
-5.0
1.9
-4.5
-9.2
-3.4
-3.5
0.9
-4.2
-5.5
7.7
-12.2
1.0
-10.4
72.4
-8.8
56.0
80.0
91.8
2.1
25.9

2021e
10.9
8.8
4.3
17.0
2.8
3.6
10.9
5.8
14.7
12.2
0.8
-10.9
1.9
-8.4
74.9
-6.3
53.6
78.6
91.3
2.9
25.3

2022f
6.8
6.2
7.7
15.2
14.9
17.7
6.8
5.5
10.7
6.0
7.2
-11.8
3.2
-7.4
77.9
-5.0
51.8
77.5
90.8
3.2
24.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2010-EICV-III and 2016-EICV-V.Actual data: 2016. Nowcast: 2017-2021. Forecasts are from 2022 to 2024.
b/ Projection using average elasticity (2010-2016) with pass-through = 0.7 based on private consumption per capita in constant LCU.

MPO

71

Apr 22

2023f
7.2
6.1
7.5
7.6
16.2
11.0
7.2
5.5
9.2
7.2
6.8
-11.4
3.6
-5.7
78.8
-3.2
50.4
76.6
90.5
3.3
24.0

2024f
7.4
5.8
8.3
6.6
15.7
9.3
7.4
5.0
8.5
8.2
5.0
-10.2
3.7
-4.2
76.0
-1.8
49.1
75.8
90.2
3.2
23.4

SÃO TOMÉ ANDPRÍNCIPE
Table 1

2021

Population, million

0.2GDP, current US$ billion

0.5

GDP per capita, current US$

2559.2

International poverty rate ($1.9)

a

25.6
a

57.0

a

82.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

40.7

School enrollment, primary (% gross)

b

106.8

b

70.4

Total GHG Emissions (mtCO2e)

0.4Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2017), 2011 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2019).

The challenges presented by the
COVID-19 pandemic and the energy crisis on São Tomé and Príncipe have beenfurther aggravated by flooding and landslides from severe rain in end-2021. Nevertheless, the economy continues to growand the outlook for 2022 is encouraging
as tourism is projected to recover. Implementing reforms in the tax system andenergy sector is paramount to ensure fiscal sustainability, robust growth, andlong-term poverty reduction.

Key conditions andchallenges
STP is a small island country heavily exposed to shocks and constrained by its remote location, weak private sector, limited
institutional capacity, and low human capital. Underdeveloped infrastructure, especially unreliable and costly electricity, is a
key challenge to growth and fiscal sustainability. STP is highly dependent on external concessional financing and has effectively pursued a “public expenditures-led”
growth model. With the structural decline
in external financing compounded by low
domestic revenue mobilization, the pace ofgrowth has slowed in recent years.
STP’s fast-growing population is young
and lacking employment opportunities,
heavily relying on informal and subsistence activities. Poverty remains widespread, with about 25.9 percent of the population living on less than $1.90 per day (in2011 PPP terms) in 2017.
The COVID-19 pandemic in STP brought
the highest death rate in Africa, at about
33 deaths per 100,000 inhabitants, compared to 19 in the rest of the continent.
Vaccination has been advancing well,
however, and as of end-February, nearly
112 thousand Santomean (corresponding
to 97 percent of the adult population or
49 percent of the total population) had received at least one vaccine dose. In December 2021, heavy rainfall and the consequent flooding caused significant damage, which led the authorities to declarea state of emergency. The December 2021
floods led to agricultural and livestock
losses and, if uncompensated, will lead toan increase in poverty. Most Santomean
households lack insurance or strategies
for coping with shocks, with 65 percent
reporting either having to reduce spending or having no strategy in the event ofa shock.

Recent developments
Real GDP growth is estimated to haveslowed down from 3.1 percent in 2020
to 1.8 percent in 2021 as international financing from development partners for
COVID-19 response declined, continued
global travel restrictions dampening therecovery of tourism, and prolonged energy shortages in mid-2021 disrupting
economic activity.
The current account deficit (CAD), excluding grants, is expected to havewidened given the increase in imports,
which was driven primarily by higher
oil prices, while low tourism activity undermined receipts. To address the unexpected fiscal expenditures resulting fromrainfall and floods, the government
drew on the recently allocated SDRs.
Thus, net international reserves in early2022 were reduced to around US$ 30
million (28 percent YoY) and covered
two months of imports.
Lower levels of external grants and domestic revenues due the economic deceleration reduced overall fiscal revenues.
However, expenditures increased given

FIGURE 1 São Tomé and Príncipe / Domestic revenue andgrantsFIGURE 2 São Tomé and Príncipe / Actual and projected
poverty rates and real GDP per capita

Percent of GDP
25

Poverty rate (%)

Real GDP per capita (constant LCU)

100

25000

90
20

80

20000

70
60

15

15000

50
40

10

10000

30
20

5

5000

10
0

0

2010

2012
2014
2016
Domestic Revenue

2018

2020
Grants

0
2010

2022P

Sources: Ministry of Finance, IMF, World Bank MTI.

2012

2014

2016

2018

72

Apr 222022

2024International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2020

the continued pandemic-related needs.
The domestic primary deficit is estimatedto have deteriorated to around 3.8 percent
of GDP and debt-to-GDP ratio increased
to 95.6 percent in 2021, with new debt
mostly from multilateral lenders.
Inflation stood at 9.5 percent in 2021 driven by higher food prices, mainly explained by the hike in global commodity
prices. The central bank continues totighten liquidity that was earlier injected
to support the economic response to thepandemic: the growth rate of the monetary aggregate (M2) went from an increase of 14 percent in 2020 to a contraction of 4.1 percent in 2021.
To help poor families better absorb
shocks and alleviate poverty, the authorities have expanded youth skills training
programs and the vulnerable families’
cash transfer program. They also extended the emergency COVID-19 shock response program providing cash transfers
to an additional 16,000 households in
2021 and 2022, which will help mitigate
the impacts of the flood and prevent anincrease in poverty.

OutlookReal GDP growth is expected to increase
modestly to 2.8 percent in 2022, driven byhigher agricultural production and exports(cocoa and palm oil), a more robust recovery of tourism, and improved industrial
activity due to better conditions in the energy sector and the implementation of externally financed projects. Additional fiscal
needs resulting from the floods, remaining
pandemic-related expenditures, and theslow recovery of domestic revenues are expected to cause a deterioration of internaland external balances in 2022. While inflation dynamics should be generally
favourable, the introduction of the VAT
may lead to temporary increase in inflation. Food inflation and insecurity may befurther exacerbated by the increase in foodprices triggered by the economic consequences of the Russian invasion, war andassociated sanctions.
As global economic conditions improve,
exports and tourism earnings will bolster

TABLE 2 São Tomé and Príncipe / Macro poverty outlook indicators(annual percent change unless indicated otherwise)
2019
2.2
2.5
1.0
0.7
3.2
7.7
-19.9
-2.6
99.9
-2.0
25.4
56.8
82.6
1.2
39.3

Real GDP growth, at constant market prices
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

the current account, although this may beoffset by the higher costs of food and fuelimports. Private and official external capital could finance a wider deficit. Addressing prolonged unsettled external arrears in
the energy sector is the main challenge fordebt sustainability.
Infrastructure destruction and economic
disruption due to the December 2021
floods highlight the risks faced by São
Tomé from climate events as well as theneed to focus on adaptation to climatechange as a key priority in the country’s
development strategy. Uninsured household losses due to the recent flooding andthe potential increase in inflation of somebasic items, partially due to the current
increase in the price of grains, could increase poverty. These effects are mitigated by the continued economic recovery
that is expected to improve household
earnings and the extension to the temporary cash program that will maintain elevated levels of social protection coverage through end-2022. As a result, poverty projections suggest little movement inoverall poverty rates.

2020
3.1
2.3
-1.1
4.4
2.2
9.4
-11.4
-4.9
87.1
-4.5
25.2
56.6
82.4
0.8
39.6

2021e
1.8
1.8
1.1
-0.8
2.5
9.5
-10.8
-4.5
95.6
-3.8
25.2
56.6
82.3
0.9
39.9

2022f
2.8
2.8
2.4
3.8
2.6
12.5
-12.0
-3.7
93.3
-3.3
25.1
56.5
82.2
0.8
40.1

2023f
3.0
3.0
3.2
4.0
2.7
11.0
-9.6
-5.3
89.9
-4.9
24.9
56.3
81.9
1.0
40.3

2024f
3.3
3.3
3.5
4.2
3.1
9.5
-8.6
-4.7
85.3
-4.3
24.8
56.2
81.7
1.1
40.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Projection using point to point elasticity at regional level with pass-through = 0.7 based on GDP per capita in constant LCU. Actual data: 2017. Nowcast: 2018-2021.
Forecasts are from 2022 to 2024.
b/ Actual data: 2017. Nowcast: 2018-2021. Forecast are from 2022 to 2024. Actual data: 2017. Nowcast: 2018-2021. Forecasts are from 2022 to 2024.

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Key conditions andchallenges

Table 1

2021

Population, million

17.2

GDP, current US$ billion

26.6

GDP per capita, current US$

1549.2

International poverty rate ($1.9)

a

7.6
a

34.0

a

66.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

38.1

School enrollment, primary (% gross)

b

83.0

b

67.9

Total GHG Emissions (mtCO2e)

39.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Growth accelerated to 6.1 percent in
2021, from 1.3 percent in 2020, driven byindustrial production and a recovery inservices as COVID-19 restrictions eased.
The fiscal deficit remained at 6.2 percent
of GDP, further increasing the debt-toGDP ratio. Risks to the outlook include
inflationary pressures, potentially exacerbated by a prolonged conflict in Ukraine,
regional insecurity, new COVID-19 variants, and extreme climate events.

Over the last decade, Senegal benefited fromenhanced international competitiveness,
lower fertility rates, and structural transformation. Pre-COVID, real GDP growth averaged around 6 percent between 2014-19,
boosted by investment, private consumption, and a favorable external environment.
However, growth was less inclusive, characterized by slow poverty reduction and stagnating inequality. The poverty incidence(using the national poverty line at FCFA
332,539 a year) declined from 43 percent in2011 to 37.8 percent in 2018/19 – falling shortof top performing sub-Saharan Africancountries, while socio-economic disparities
persist. COVID-19 worsened the situation,
especially in urban areas, where service activities are concentrated. However, thepoverty gap deteriorated more in rural areas, suggesting that the rural poor suffered
most. In addition, the pandemic worsened
non-monetary poverty with potential longterm negative effects on human capital, notably through lower school attendance.
Structural vulnerabilities hamper Senegal’s potential growth. Total factor productivity declined from 2000 to 2014 andgrew tepidly from 2015, highlighting boththe low level of human capital and structural labor-supply constraints. In addition,
insufficient competition, and inadequate
financing have constrained the development of the private sector, limiting job creation in productive sectors.

FIGURE 1 Senegal / Evolution of main macroeconomic
indicators
Percent and percentage points
12

6

0

2015

2017
2019e
2021p
2023p
GDP growth (%)
Primary fiscal balance (% of GDP)
Current account balance (% of GDP, rhs)

60000070

50000060

400000

50

-10

-4

70000080-8-2Real private consumption per capita (constant LCU)

90

-6

2

Growthacceleratedin2021to6.1percent(3.3percent in per capita terms), from 1.3 percent
in 2020 (-1.4 percent in per capita terms), driven by private consumption and investment. Industrial production and services
were strong while agriculture grew moderately after arecord contribution in 2020.
Inflation decelerated from 2.5 in 2020, to
2.2 in 2021 percent, due to a slower increase for food prices and lower telecommunication prices. Food prices contributed
1.4 ppts in 2021, compared to 1.6 ppts in2020 driven by robust domestic supply inH1-2021, from record production in 2020,and fiscal measures implemented to limit
basic food price increases. However, food

100

-4

4

-6

Poverty rate (%)-2

8

Recent developments

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

Percentage points
0

10

Risks are mainly on the downside. A more
prolonged conflict in Ukraine could increase pressure on food and energy prices,
further reducing global demand and increasing the risk of food insecurity in therural regions. The COVID-19 crisis aggravated emerging fiscal vulnerabilities, underlining the importance of transparent,
effective fiscal and debt management in
the mid-term. In addition, insecurity
spreading from the Sahel and political turmoil in neighboring countries could negatively affect economic activity and investments in the eastern provinces and reduce
exports. Finally, Senegal is exposed to climate shocks (floods, droughts, and associated health hazards), which could reduce
agricultural productivity and adversely
impact the recovering tourist industry.

40

3000003020000020

100000

10

-12

0

0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Sources: Senegalese authorities and World Bank staff calculations.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Sources: Senegalese authorities and World Bank staff calculations. Notes: see
Table 2.
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prices started picking up in June 2021,
reaching 3.8 percent y/y in December 2021.
The current account deficit (CAD) widened
slightly from 9.9 percent of GDP in 2020, to
10.2 percent in 2021, driven by oil and gas investment-related services imports, while
key export markets such as tourism remained subdued. The deficit was financed
by strong hydrocarbon related foreign direct investment and commercial borrowing.
The fiscal deficit remained high for a second consecutive year, at 6.2 percent of
GDP in 2021 (6.3 percent of GDP in 2020)
as COVID response measures extended into 2021. An increase in tax revenues partly
offset a drop in grants, with total expenditures at 25 percent of GDP. The debtto-GDP ratio reached 72.5 percent of GDP
end 2021, a +9.4 ppt increase since 2019.
Senegal’s monetary and exchange rate
policies are managed by the Central Bankof West African States (BCEAO), which
maintains a fixed peg between the CFA
Franc and the Euro. Its reserves reached
5.8 months of imports of goods and services in 2021, as a result of increased exports, the August 2021 IMF SDR allocation, and portfolio inflows linked to Eurobond issuances in the region (by Benin,
Côte d’Ivoire, Senegal and BOAD).
Poverty incidence (USD 3.2 a day,2011 PPP) is estimated to have remained at around 34 percent in 2021.
Spatial inequalities increased as

growth drivers were concentrated inurban areas, while rural areas remain
more vulnerable to shocks as social
safety nets remain nascent.

Outlook
The recovery momentum is jeopardized by
the conflict in Ukraine. Real growth is expected to decelerate to 4.4 percent in 2022,
as private consumption and investment decline with higher food and energy prices
and greater uncertainty. In 2023-2024,
growth could average 9.5 percent, driven by
the expected start of hydrocarbon production. Inflation is expected to peak at 3.8 percent in 2022, due to trade disruptions exacerbated by the conflict in Ukraine, with energy and food prices rising the most.
The CAD is expected to widen to 10.8 percent of GDP as import prices, notably forenergy, sharply increase. Hydrocarbon receipts should significantly improve CAD
balances in 2023-2024. The deficit will be financed by oil-sector related foreign investment and a mix of concessional and commercial borrowing.
Fiscal policy is expected to remain expansionary for a third consecutive year as thegovernment tries to shield the populationfrom the impacts of the Ukraine crisis. The
fiscal deficit is projected to increase to 6.8

TABLE 2 Senegal / Macro poverty outlook indicators

percent of GDP in 2022 up from a projected
4.8 percent before the war, as fuel subsidies rise and import duties and VAT tax
holidays are implemented to limit the increase in domestic food prices. The deficit
should gradually narrow to reach the
WAEMU target of 3 percent by 2024, driven by a revenue based fiscal consolidation. The debt-to-GDP ratio should peakat 73.1 percent in 2022, before gradually
decreasing driven by higher nominal GDP
and lower fiscal deficits.
WAEMU reserves are expected to fall toaround 5.5 months of imports in 2022 and5.3 months in 2023 and 2024, reflecting
faster growth in imports and a reduction in
net capital inflows (as a percent of GDP),as the environment for Eurobond issuances remains uncertain. Growthfriendly fiscal consolidation and the implementation of structural reforms are key tomaintaining reserves at an optimal level.
The poverty rate is expected to remain stable at around 34 percent in 2022 as growth
remains concentrated in urban areas. Recent fiscal measures, including the removalof regressive tax exemptions, should contribute to alleviate poverty. Over the medium-term, poverty rates are expected togradually revert to pre-crisis levels withmore progressive fiscal measures, combined with the extension of social safety
nets, preventing vulnerable households
from falling into poverty.

(annual percent change unless indicated otherwise)
2019
4.6
3.8
7.5
10.3
14.7
6.8
4.5
4.3
5.0
4.3
1.0
-8.0
-3.9
63.1
-2.0
7.6
33.9
66.7
6.2
36.1

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
1.3
2.2
2.6
4.3
-13.2
7.0
1.9
12.8
-0.4
-0.1
2.5
-9.9
-6.3
67.8
-4.2
7.6
34.0
66.7
2.9
36.4

2021e
6.1
6.0
5.4
5.0
14.7
8.0
5.8
-1.0
10.9
5.7
2.2
-10.2
-6.2
72.5
-4.2
7.5
33.8
66.4
4.1
37.4

2022f
4.4
4.0
11.5
3.3
9.1
7.5
4.4
5.1
5.3
3.8
3.8
-10.8
-6.8
73.1
-4.7
7.4
33.7
66.1
3.7
38.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2011-ESPS-II and 2018-EHCVM.Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using point to point elasticity at regional level with pass-through = 0,7 based on private consumption per capita in constant LCU.

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2023f
8.5
6.1
10.4
4.3
16.9
7.0
8.5
5.4
10.0
8.7
2.9
-8.5
-3.9
69.7
-1.7
7.3
33.3
65.4
6.4
39.9

2024f
10.6
8.9
7.8
5.3
16.0
6.8
10.6
6.5
12.8
10.8
2.6
-5.8
-3.0
64.5
-1.0
7.0
32.8
64.5
6.3
41.9

SEYCHELLES

Key conditions andchallenges

Table 1

2021

Population, million

0.1

GDP, current US$ billion

1.4

GDP per capita, current US$

13991.5

International poverty rate ($1.9)a0.5

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

1.1

a

a

5.2
32.1

School enrollment, primary (% gross)

b

100.8

b

73.9

Total GHG Emissions (mtCO2e)0.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Real GDP increased by 7.9 percent in
2021 and is projected moderate to 4.6
percent in 2022 as tourist arrivals decline because of the impact of the Russian invasion of Ukraine. In the mediumterm the fiscal balance is expected to return to a sustainable path as the government undertakes fiscal consolidationand the economy continues to recover.
Poverty declined in 2021 due to improvement in economic growth.

Tourism and fisheries are the key sectorsof the Seychelles’ economy. The fishingindustry, which is host to one of thelargest tuna canneries in the world, contributes to between 8 and 20 percent
to GDP annually and the tourism sector
contributes 30 percent to GDP. The country is also dependent on imports. This
lack of economic diversification exposes
Seychelles to external shocks. These
shocks are transmitted through disruptions in international travel and tourism
demand, as well as through fluctuations
in fishing stocks and instabilities in theprice of essential commodities such as
food and fuel prices.
Before the pandemic, Seychelles wason a steady path to decrease poverty,
reaching around 5.0 percent in 2019
(when measured against the poverty
line for upper middle-income countries
of USD 5.5 a day per capita in PPP
terms). While the decline in the poverty rate has been driven by a rise inincomes from paid employment andself-employment and substantial benefits from various social protection programs, salary cuts and job losses in the
tourism industry due to COVID-19 increased poverty rates to 6.6 percent in2020. To limit the poverty impacts ofthe crises, the government introduced
several social protection programs andsome low-income households opened

FIGURE 1 Seychelles / Fiscal balance and public sector debt

Percent of GDP

120

5

100

Economic growth is estimated at 7.9
percent for 2021 due primarily toa recovery in the tourism sector.
Tourist arrivals rebounded in 2021
following the reopening of borders
in late March 2021, and the emergence of new tourist markets (Russia,
UAE and Israel). With the fisherysector selling about 50 percent of
the domestic artisanal catches to resorts and restaurants, the fishery sector grew by 2.5 percent in 2021 as
the tourism sector recovered. Private
consumption also contributed to therecovery in the economy. The average inflation rate was 10.0 percent inPoverty rate (%)

Real GDP per capita (constant LCU)

16

12000014

100000

12

0

80

8

60
-10

60000

6

40

-15

80000

10

-5

40000

4

20

-20
-25

Recent developments

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

Percent of GDP

10

temporary roadside stalls to sell fruits
and seafood products to cope with theshock. As tourism started to return,social protection programs were ended as they became a burden to the national budget. While the end of social
protection programs reduced government fiscal pressures, there are reasons
to believe that poverty may have been
negatively affected.
The recovery process may be hinderedby the emergence of new COVID-19 variants. In addition, Russia’s attack on
Ukraine is expected to increase the concerns around inflation since Russia isamong the world's biggest oil exporters
and a major grain exporter along with
Ukraine, whose Black Sea ports havebeen closed to shipping.

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Primary Balance (LHS)
Overall Balance (LHS)
Public Sector Debt (RHS)

20000

2
0

0

0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Sources: WDI 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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2021 due to increased domestic demand and rising imported inflation
due to tight supply conditions. Despite a gradual revival of tourist activity, the current account deficit remained high at -20.3 percent of GDP
in 2021 (compared to -29.7 percent
in 2020). Gross international reserves
stood at US$ 702 million at end-December 2021 (4.8 months of imports).
Due to the withdrawal of the COVID-19
fiscal support package, the fiscal balance
deficit improved from 17.8 percent of GDP
in 2020 to 9.1 percent of GDP in 2021. The
decline in transfers (to around 9.0 percent
of GDP in 2021 from 18.0 percent of GDP
in 2020), reflects the removal of COVID-19
measures such as the guarantee of salaries
to the private sector and the increase in allocation to social protection to finance theunemployment relief scheme program
which were all stopped in early 2021.
As a result of the increase in visitor arrivals, poverty is expected to decrease
from 5.3 percent in 2021 to 5.2 percent in
2022. However, due to the end of the financial assistance for job retention programthat the government had introduced tomitigate the poverty impacts of COVID-19,
poverty numbers for 2021 and 2022 could
be higher than the above projection.

Outlook
Economic growth is projected to average
5.1 percent over the medium-term. Given
the structure of the domestic economy, its
recovery is conditional on external developments, specifically the revival of the
global travel and tourism industry. Tourist
arrivals are projected to moderate to a
growth rate of 14 percent in 2022, relative
to 59 percent in 2021 (due to projected lostin tourist arrivals from Russia and Ukraine(23 percent of arrivals in 2021)) and theeconomy is projected to grow by 4.6 percent. In 2023 and 2024, economic growthis projected to be 5.6 percent and 5.0 percent, respectively, as tourism continues torebound. Food and oil prices are expected
to remain elevated in 2022 as the Russian
invasion of Ukraine continues and cause
supply disruptions in commodity (wheat
and maize) and fuel.

TABLE 2 Seychelles / Macro poverty outlook indicators

The fiscal deficit is expected to contractover the medium-term, as the government continues fiscal adjustment. The
GOS
introduced
expenditure-saving
measures in 2021 that are expected tocontinue in the medium term, including:limiting new recruitments to key positions in certain ministries and departments; freezing salaries for public service employees; freezing long term service allowance; and limiting the introduction of new schemes of government
service. In the medium-term, revenue
collection will increase, driven by a resumption of economic activities as wellas measures to improve tax policy suchas: (i) the prevention of base erosion of
the corporate tax base through international profit shifting; (ii) streamlining of
VAT exemptions.
Poverty is projected to continue to decline gradually to 5.1 percent and 5.0
percent by 2023 and 2024 ($5.5 a day
per capita line), respectively. Nevertheless, this depends on the ability of the
tourism and services sectors to fully
bounce back to their pre-COVID-19 levels
over the next few years.

(annual percent change unless indicated otherwise)
2019
2.0
4.8
-0.2
-2.7
2.0
0.9
1.8
1.1
2.1
1.7
2.0
-18.8
17.7
1.0
58.7
3.6
0.5
1.1
5.0
3.7
79.8

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-13.3
-10.8
4.3
-37.7
-39.6
-38.2
-13.4
-0.2
0.7
-15.4
1.2
-29.7
10.1
-17.8
102.3
-14.3
0.7
1.5
6.6
-2.8
80.6

2021e
7.9
8.8
2.3
22.1
12.2
14.3
7.9
3.1
3.6
8.7
10.0
-20.3
13.1
-9.1
76.5
-6.6
0.6
1.2
5.3
7.3
81.5

2022f
4.6
6.8
0.4
7.1
16.8
15.3
4.6
1.0
2.4
5.0
5.7
-27.7
11.0
-5.7
79.6
-3.2
0.5
1.2
5.2
5.8
82.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-HBS. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.87 based on GDP per capita in constant LCU.

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2023f
5.7
7.0
-3.8
9.7
17.8
14.4
5.6
1.4
2.0
6.2
1.6
-23.0
14.6
-1.6
76.8
0.9
0.5
1.0
5.1
6.3
82.8

2024f
5.0
4.7
4.0
3.5
17.4
14.9
5.0
1.1
2.0
5.5
1.2
-18.4
13.1
0.9
73.5
3.2
0.4
1.0
5.0
5.3
83.3

SIERRA LEONE
Table 1

2021

Population, million

8.1

GDP, current US$ billion

4.1

GDP per capita, current US$

504.4

International poverty rate ($1.9)

a

43.0

Lower middle-income poverty rate ($3.2)
Gini index

a

a

76.0
35.7

School enrollment, primary (% gross)

b

141.3

b

54.7

Total GHG Emissions (mtCO2e)

11.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

After contracting in 2020, Sierra
Leone’s economy grew by 3.1 percent in
2021, driven mainly by agriculture andmining. The fiscal deficit remained elevated, despite improvements in revenues, driven by overruns in recurrent
spending. With growth averaging 4.4
percent during the medium-term, poverty is expected to return to its 2019 levelby 2023, but high inflation is eroding
real incomes and may affect the outlook.
The Ukraine-Russia crisis presents risks
to the outlook primarily through fluctuations in commodity prices.

Key conditions andchallenges
Sierra Leone’s economy is highly dependent on mining and agricultural activities,
making it vulnerable to external (e.g., commodity prices and global demand) and domestic shocks (e.g., weather). Prior to the
Ebola epidemic, mining, primarily ironore, accounted for 15 percent of GDP and
about 80 percent of merchandise exports.
However, the sector has exhibited significant volatility in recent years, with iron ore
output declining to almost zero in 2018–20.
Thus, while growth averaged 4.2 percent
over the past decade, it has fluctuatedwidely (by 10.3 percent from the mean,
two-thirds of the time). In 2015, the economy was hit simultaneously by a collapse
in global commodity prices and the Ebola
epidemic. In 2020, the COVID-19 pandemic also affected domestic and external demand concomitantly. Mobility restrictions
adversely impacted private sector employment and incomes, especially in urban areas, leading to a likely increase in poverty.
The authorities have struggled to restore
macroeconomic stability and fiscal balances since the Ebola shock. Since 2014, thebudget deficit has exceeded 5.5 percent ofGDP, due to low domestic revenue mobilization (average of 12.6 percent of GDP)and expenditure overruns (average of 22.0
percent of GDP). Sierra Leone is at highrisk of debt distress, with debt dynamics
partly affected by increased reliance on expensive domestic borrowing. The ratio ofinterest payments to domestic revenue wasestimated at 19.8 percent in 2020. Inflation
has remained elevated, largely in double
digits, raising concerns for food security.
Economic growth has translated into modest per capita income gains because of
rapid population growth (averaging 2.1
percent per annum). About 80 percent of
the population is under the age of 35 years,
making efforts to accelerate job creationand increase access to public services (e.g.,
healthcare and education) a critical challenge. Poverty (measured using the international poverty line of US$1.9 per day,2011 PPP) fell by 11.7 percentage points
over the last decade to 43 percent in 2018.
Since three-quarters of the poor live in rural areas, poverty among subsistence farmers remains a major challenge.

Recent developments
After contracting by 2 percent in 2020, theeconomy grew by 3.1 percent in 2021, reflecting the easing of mobility restrictions
as well as fiscal stimulus and structural reform efforts. Agriculture contributed
more than half of overall growth (1.9 percentage points) due to increased private
sector participation in input market. Bothindustry and services contributed 0.6 percentage points each, reflecting a gradual recovery of mining and manufacturing as well as trade and tourism. On the
demand side, growth was driven by final consumption and gross investments(mainly public investment following theresumption of capital projects). Headline

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

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

Percent, percentage points
6

Poverty rate (%)

420Agriculture
Industry
Services
GDP at Factor Cost

-2

Real GDP per capita (constant million LCU)

90

1.80

80

1.60

70

1.40

60

1.20

50

1.00

40

0.80

30

0.60

20

0.40

10

0.20

0

0.00
2011

-4

2013

2015

2017

International poverty rate

2019

2020

2021e

2022f

2023f

2024f

Real GDP pc

Sources: StatSL and World Bank.

Source: World Bank. Notes: See Table 2.

MPO

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2019

2021

2023

Lower middle-income pov. rate

inflation declined to 8.9 percent in March
2021, before it accelerated to 17.9 percent(year-on-year) by end-December, reflecting global food price increases as well
as a combination of recovering domestic
consumer demand and enduring supply
chain disruptions. High food inflation increased the share of the food insecure
population from 50 percent (3.6 million)
in 2015 to 57 percent (4.7 million) in
2020. The share of the population living
in poverty is estimated to have increased
during the early stages of the pandemic
in 2020 (especially in urban areas among
the self-employed) by about 2 percentage
points, before it fell marginally in 2021.
The overall fiscal deficit increased slightly
by 0.1 percentage points to 5.9 percent of
GDP in 2021, mainly due to higher-thanexpected expenditure on wages, goods
and services, and subsidies for electricity
generation. The expenditure overruns
were aggravated by inflation as the priceof goods and services rose. However, revenue collection improved remarkably,
and tax revenue reached 15.3 percent ofGDP, up from 13.8 percent of GDP in theprevious year, due in part to one-off mining revenues. Public debt increased from76.3 percent in 2020 to an estimated 76.9
percent of GDP in 2021, mainly becauseof new multilateral borrowing. The current account deficit widened with the recovery in domestic demand and the depreciation of the Leone (by 11 percent

against US dollars, and 9 percent in theparallel market). However, gross external
reserves increased to US$933 million (6.1
months of imports), with the new International Monetary Fund Special Drawing Rights allocation (US$281 million) enhancing the country’s ability to cushion
external shocks.

Outlook
The economy is expected to gradually recover, mainly due to mining and agriculture. Real GDP growth is projected to average 4.4 percent over the medium term
(2022–24), with contributions from investments (especially in mining and agriculture) on the demand side, and from agriculture, tourism, construction, and mining
and manufacturing on the supply side.
Headline inflation is expected to remain
elevated in the coming years and decline
gradually to single digits as domestic foodproduction increases by 2024 and offsets
the effect of high international prices. A
sustained increase in fertilizer and fuelprices in 2022 due to the ongoing UkraineRussia conflict is likely to hamper agricultural production. While strong overall
growth may reduce poverty, headwinds
from inflation, including the rise of fueland fertilizer prices, may dampen
progress, keeping the poverty rate above

TABLE 2 Sierra Leone / Macro poverty outlook indicators

the level recorded in 2019 for longer than
expected. The overall fiscal deficit is projected to narrow to 3.0 percent of GDP by
2024, driven by gains in domestic revenue
mobilization, expenditure rationalization,and public financial management reforms.
Fiscal policy would focus on protecting social expenditures to support human capitaldevelopment. The current account deficit
is expected to narrow to 12.9 percent of
GDP by 2024 as the recovery in the mining
sector boosts export growth.
The outlook is subject to significant
downside risks and uncertainties related
to the Ukraine-Russia crisis, the 2023 general elections, and the path of the pandemic. Wide fluctuations in commodity
prices due to the war in Ukraine can poseboth gains and losses for the economy,
while a sharp rise in global food and fuel prices poses a risk of higher inflationand potentially increased food insecurity. Higher domestic inflation can cause
expenditure overruns, while higher fuel prices, if not passed through to consumers, can put pressure on the government’s subsidy bill. On the upside, asharp increase in the price of metals suchas iron ore can: (i) significantly affect themining outlook; (ii) present terms of tradegains; (iii) bolster the demand for Sierra
Leone’s iron ore as the world searches foralternative sources; and (iv) increase government revenue from mining.

(annual percent change unless indicated otherwise)
2019
5.3
4.3
5.1
-34.2
-1.6
-7.0
5.3
5.4
10.9
3.8
14.8
-15.3
7.9
-3.1
70.9
-0.4
41.1
74.7
3.1
15.1

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-2.0
4.3
2.7
-4.1
-9.8
7.5
-2.0
1.6
-7.1
-5.9
13.5
-7.0
3.4
-5.8
76.3
-2.7
43.4
76.3
1.4
14.6

2021e
3.1
4.2
0.1
7.6
40.5
18.4
3.1
3.7
3.8
2.0
11.9
-13.7
8.5
-5.9
76.9
-2.8
42.8
75.9
3.0
14.5

2022f
3.9
6.2
0.0
9.8
18.0
12.4
3.9
3.5
9.4
2.9
14.2
-15.9
8.0
-5.0
76.8
-2.0
41.7
75.2
3.0
14.4

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2011-SLIHS and 2018-SLIHS. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using point-to-point elasticity (2011-2018) with pass-through = 0.87 based on GDP per capita in constant LCU.
MPO

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2023f
4.4
4.9
15.7
13.1
9.5
13.1
4.4
3.6
4.7
5.5
12.1
-13.9
6.8
-4.2
76.8
-1.4
40.3
74.2
2.7
14.3

2024f
4.8
5.9
0.9
12.4
10.1
7.8
4.8
3.6
4.7
6.7
10.9
-12.9
6.2
-3.0
75.3
-0.1
38.8
73.1
2.8
14.1

SOMALIA

Key conditions andchallenges

Table 1

2021

Population, million

a

15.2

GDP, current US$ billion

7.3

GDP per capita, current US$

480.0

International poverty rate ($1.9)
Gini coefficient

b

69.1

b

37.0

School enrollment, primary (% gross)
Life expectancy at birth, years

c

33.0

d

57.4

Sources: World Development Indicators (WDI), World
Bank, UNFPA, and Macro Poverty Outlook.
a/ Estimates based on 2013 population estimates by
UNFPA and assumes an average annual population growthof 2.8 percent.
b/ Most recent value (2017).
c/ Somali Poverty and Vulnerability Assessment Report(World Bank, 2019).
d/ Life expectancy for 2019 from WDI.

The economy is showing modest signs ofrecovery with real GDP growth estimatedat 2.2 percent in 2021, following a contraction of 0.3 percent in 2020. Increased
private sector activity in urban areas,higher remittance inflows, and a reboundof exports are driving the recovery. However, recurrent climatic shocks and political uncertainty are affecting the economy
and wellbeing of the population, contributing to forced displacement andwidespread poverty.

While Somalia is making gradual progress
towards building its foundational institutions, key drivers of fragility prevail. Decisions on power and resource sharing between the Federal Government and the regions are still to be made, particularly insectors such as security and natural resources. Decades of conflict destroyed infrastructure, led to a flight of human capital, and eroded the social contract. The current administration’s term ended in February 2021, but disagreements over election
modalities have led to delays in the elections and contributed to rising tensions between the regions.
Poverty levels are high and widespread.
The international poverty rate (using the
US$1.90/person/day poverty line) was estimated at 69 percent in 2017. Although remittance inflows support household consumption, most Somalis will remain poor
without growth in per capita income. External shocks such as climatic disasters andthe COVID-19 pandemic have led to a lossof livelihoods, increased food insecurity,and contributed to forced displacement.
Economic growth has been low andvolatile due to persistent insecurity andclimatic shocks, leading to insufficient job
creation. Real GDP growth averaged 2.9
percent between 2014 to 2021, on par withpopulation growth rate. Overall employment remains low, with just over half ofthe population participating in the labormarket. The traditional economic activities
such as livestock production and thebooming new services sectors such as
telecommunications provide insufficientjobs to move people out of poverty. Withno monetary policy instruments and almost no fiscal space, Somalia lacks the policy options to respond to shocks or to invest in human and physical capital. Somalia is addressing high levels of indebtedness through the Heavily Indebted Poor
Countries (HIPC) initiative, which provides an anchor for implementing structural reforms and accessing financing forinvestments required to stimulate growth
and reduce poverty.

Recent developments
The economy made a modest recovery in
2021, growing by an estimated 2.2 percent following a contraction of 0.3 percent
in 2020. By February 2022, only 5.5 percent of the population was fully vaccinated, raising the prospect of a lingering
COVID-19 pandemic. Economic activities
in cities are the main drivers of growthand higher demand for imported consumer goods (y-o-y increase of 9 percent
in 2021) is supporting consumption andinvestment. Credit to the private sector
grew by over 40 percent and remittanceinflows increased by 30 percent in 2021
compared to the previous year. Exports in
2021 have recovered to the pre-COVID-19
level, although a severe drought muted
performance in the fourth quarter. Inflation has remained below 5 percent due

FIGURE 1 Somalia / Overall budget balance

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

US$, Millions
60

Poverty rate (%)

Real GDP per capita (constant 2015 USD)

110

430

100

425

90

420

80

415

0

70

410

-10

60

405

50
40
30
20
10

-20
50

-30
-40

400
2017

2019Q1

2019Q3

2020Q1

2020Q32021Q12021Q3

Sources: Somalia authorities and World Bank staff calculations.

2019

80

Apr 22

2023

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

to de facto dollarization. However, theworsening drought and the Ukraine/Russia crisis are pushing up prices and worsening the external position. A 35 percent
increase in both wheat and oil prices will
widen the import bill by 2.2 percent of
GDP in 2022.
The delayed election is contributing to fiscal challenges. While domestic revenue
mobilization improved in 2021 (rising by
9 percent compared to 2020), multilateral
partners have withheld budget support
until the elections are completed. Total expenditures outstrip revenue collection (seeFigure 1) leading to liquidity pressures
which were addressed through the 2021
SDR allocation. To mitigate the impact ofrecent climatic shocks, the government’ssocial safety net program, Baxnaano, hasbeen supported by development partners.
The need for humanitarian assistance remains critical as over 4.1 million people are
estimated to be food insecure.
Poverty in Somalia is deep and widespread, increasing susceptibility to negative shocks. 70 percent of the population
are projected to have lived below thepoverty line in 2021 with the majority ofthe population having experienced a reduction in income compared to pre-pandemic levels.

Outlook
The COVID-19 vaccination rate is expected to pick up with increasing support from development partners in thehealth sector. The economy is projected
to grow over the medium-term, butrisks remain significant. Real GDP
growth is estimated at 3.0 percent in
2022 and is projected to reach 3.5 percent in 2023. The outlook assumes sustained growth in remittances which will
boost investment and consumption; continued social protection measures tocushion household incomes, especiallyamong the vulnerable; as well as elections dividends which will support improved business confidence and unlock
donor flows. Economic reforms and increased public investment should attract

TABLE 2 Somalia / Macro poverty outlook indicators

FDI and encourage broad-based private
sector activity, which will gradually
boost Somalia’s low domestic productive capacity. Climate shocks, politicalrisks, and insecurity pose significant
challenges to growth prospects. A prolonging of the Russian invasion in
Ukraine could further exacerbate inflationary pressures for food and fuel,which are likely to hurt the poor, andincrease the overall import bill.
While the economic rebound has pushed
nominal GDP per capita to US$480 in
2021 from US$471 in 2020, real per capita
GDP declined by -0.5 percent per year on
average between 2017 and 2021, depressing living standards for most Somalis.
The international poverty rate is projected
to remain at around 70 percent between
2022 and 2024. Accelerating the pace ofpoverty reduction will require policy interventions and public investments thatraise productivity, create jobs, and expand pro-poor programs which focus on
women and youth.

(percent of GDP unless indicated otherwise)
2019
3.3
4.8
-10.9
-66.3
24.4
29.4
0.3
3.5
1.7
4.9
2.5
82.0
67.7
88.5
97.8

Real GDP growth, at constant market prices
CPI Inflation, annual percentage change
Current Account Balance
Trade balancePrivate remittances
Official grantsb

Fiscal Balance
Domestic revenue
External grants
Total expenditure
Compensation of employees
External debtc,dInternational poverty rate ($1.9 in 2011 PPP)c,dLower middle-income poverty rate ($3.2 in 2011 PPP)c,dUpper middle-income poverty rate ($5.5 in 2011 PPP)

2020
-0.3
4.2
-11.7
-66.6
23.2
29.9
0.1
3.0
4.2
7.1
3.3
65.0
69.5
89.4
98.0

2021e
2.2
4.6
-13.2
-69.4
28.7
28.2
-1.3
3.1
2.0
6.5
3.4
61.8
69.8
89.5
98.0

Sources: Federal Government of Somalia, IMF, and World Bank staff estimates.
Notes: e = estimate; f = forecast.
a/ GDP baseline estimates 2019-20 are by Somalia National Bureau of Statistics (SNBS, June 2021).
b/ Federal Government of Somalia (FGS).
c/ Calculations based on 2017 SHFS-wave 2. Actual data: 2017. Nowcast: 2018-20. Forecasts are from 2022-24.
d/ Projection using neutral distribution (2017) with pass-through = 1 based on private consumption per capita in constant US dollars.

MPO

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2022f
3.0
5.0
-12.9
-73.8
32.3
29.8
0.0
3.2
3.3
6.5
3.2
58.0
69.7
89.5
98.0

2023f
3.5
4.0
-14.4
-76.2
32.1
30.8
0.1
3.7
3.5
7.0
3.0
54.4
69.4
89.3
97.9

a

2024f
3.9
3.8
-15.3
-75.7
31.5
30.1
-1.1
4.0
2.3
7.3
3.1
49.9
68.7
89.0
97.9

SOUTH AFRICA
Table 1

Key conditions andchallenges

2021

Population, million

60.0

GDP, current US$ billion

418.1

GDP per capita, current US$

6963.9International poverty rate ($1.9)

a

18.7
a

37.3

a

56.9

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

63.0

School enrollment, primary (% gross)

b

98.4

b

64.1

Total GHG Emissions (mtCO2e)

565.7

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2011 PPPs.
b/ Most recent WDI value (2019).

The South African economy reboundedby 4.9 percent in 2021, driven by amore favorable global environment andless severe economic impact of domestic
COVID-19 waves. However, the recovery has been jobless so far. Poverty hasreached levels not seen in over a decade,which puts further pressure on budget
spending. Domestic growth drivers remain weak and structural reforms needto continue to achieve higher growthand job creation.

The global environment – especially favorable commodity prices – has driven South
Africa’s economic recovery so far, supporting GDP growth, the current account, andfiscal revenues. Households’ consumption
growth has recovered from last year’s recession but the deteriorated labor market
is likely to hamper a more dynamic andsustainable growth trend. Investment continues to be weak amid persistent structural constraints, such as electricity outages.
Despite slow vaccination uptake (29.6 percent of the population is fully vaccinated),
the last wave of COVID-19 infections, driven by the Omicron variant, has had limited health and economic impacts. However,some sectors, such as tourism, remain affected by the global pandemic.
The recovery has not improved social
outcomes. Net jobs have continued tocontract over Q1-Q3 2021. The unemployment rate reached 34.9 percent end-September 2021. Labor force participation is
also low, resulting in only about 1 in
3 South African of working age having
a job. Consequently, poverty rates haveclimbed to the levels of more than adecade ago, undoing years of progress.
This social hardship translated into civil
unrest in July 2021, causing significant
economic damage and putting pressure
on the government to increase social support, with calls from different stakeholders to introduce basic income support.

South Africa’s economy remains fragile
and is only expected to get back to
its 2019 real GDP level this year. After
more than a decade of slow growth,real GDP per capita is close to its 2015
level. As domestic growth drivers remain weak, South Africa is vulnerable
to changes in the global environment,
including external demand and prices,
inflationary pressures, and financing
conditions, especially in the context of
the Russia-Ukraine war and associatedsanctions from other countries. Elevatedglobal oil prices are expected to translate into more inflation, which affects
the poor disproportionately. Higher
metal prices should help cushion theimpact on the trade balance and growthand support fiscal revenue. Domestically, additional waves of COVID-19 infections could translate into further job
losses. A lack of improvement in living
standards would threaten social stability
and put additional pressure on alreadystrained public finances.

Recent developments
South Africa’s economy started to recover in 2021, with GDP growth reaching 4.9 percent. Buoyed by favorable
global demand and prices, the mining
sector grew by 11.8 percent. Terms oftrade are more than 10 percent higher than their pre-pandemic level, supporting the external sector. The merchandise trade balance recorded a surplus of 7.2 percent of GDP in 2021.

40

74000

91

30

72000

88

20

70000

85

10

68000

Real GDP

Sep-21

94

Jul-21

76000

May-21

50

Mar-21

97

Jan-21

78000

Nov-2060

Jul-20100

Sep-2080000

Mar-2070May-20103

Jan-2082000

Nov-1980

Jul-19Poverty rate (%)

Sep-19In percent of Q1 2020 value
106

Mar-19FIGURE 2 South Africa / Actual and projected poverty rates
and real GDP per capita

May-19FIGURE 1 South Africa / Real GDP and employment

Real GDP per capita (constant LCU)

0

66000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Employment

Sources: Stats SA, 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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Apr 22

South Africa’s inflation rate has been rising
but pressures have been more muted thanin other emerging countries, with inflation
expectations well anchored within theCentral Bank’s target band of 3-6 percent.
Average inflation reached 4.6 percent lastyear while core inflation was 3.1 percent.
This allowed the South African Reserve
Bank (SARB) to maintain an accommodative monetary policy stance. It only started
hiking the key repo rate end-2021. After
three 25 basis points increases, the monetary policy rate stands at 4.25 percent.
Boosted by higher growth and commodity prices, fiscal revenue outperformed
budget forecasts. Tax revenue is estimated at R1.55 trillion for fiscal year 2021,
R182 billion more than in the budget(+2.9 percent of GDP). This windfall has
been used to increase spending, notably
R38 billion (about 0.6 percent of GDP) to
mitigate the persistent effects of the pandemic after the July unrest, and to reduce
the fiscal deficit, now projected at 5.8 percent of GDP (against 7.8 percent of GDP
in the last MPO).

OutlookHampered by persistent structural constraints, GDP growth is expected to slow
down to 2.1 percent in 2022 and to average
1.7 percent over the medium term. Weakinvestment, electricity shortages, transportand logistical costs, and bottlenecks continue to weigh on economic activity. Important long-standing steps were taken
last year, including the increase in the licensing threshold for embedded electricity
generation. However, more needs to bedone to stimulate private investment andjob creation. Inflation is projected at 5.5
percent in 2022, before returning to the
SARB target rate in 2023-2024.
Unemployment is expected to remain elevated, projected at 33.4 percent in 2022,
which will limit the potential for progresson poverty and inequality. The upper-middle-income-country poverty rate is estimated to reach 58.6 percent this year anddecline only marginally to 58.3 percent in

TABLE 2 South Africa / Macro poverty outlook indicators

2024. To mitigate theses social impacts,
Government has extended the Social Reliefof Distress grant (“COVID-19” grant) provided to unemployed working-age adults
by another year, for an estimated cost of
R44 billion.
Despite recent improvements, South
Africa’s public finances remain in a difficult situation. The revenue performanceis expected to be temporary. The government has an ambitious consolidation plan,
which mostly relies on controlling the public sector wage bill. Slippages coming frompressures from the wage bill, financiallydistressed SOEs, and social protection
would put fiscal sustainability at risk. This
would also crowd-out developmental expenditure, as debt service costs are alreadythe fastest spending category and represent about 15 percent of total spending.
Prioritizing the allocation of limited resources where they can have the highest
impact will be critical to balance fiscal sustainability and developmental needs.

(annual percent change unless indicated otherwise)
2019
0.1
1.1
2.7
-2.4
-3.4
0.5
0.1
-6.3
-1.7
0.9
4.1
-2.6
0.5
-5.1
57.4
-1.5
19.4
38.2
57.7
4.5
83.8

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-6.4
-6.5
1.3
-14.9
-12.0
-17.4
-5.9
13.4
-12.6
-4.3
3.3
2.0
1.5
-10.0
70.7
-5.8
21.4
40.8
59.8
0.9
83.8

2021e
4.9
5.7
0.0
2.0
9.9
9.4
4.8
8.3
6.2
4.2
4.6
3.7
9.5
-5.8
69.1
-1.4
20.5
39.6
58.8
3.1
84.4

2022f
2.1
3.0
-0.9
5.5
2.5
6.0
2.1
2.5
1.6
2.3
5.5
0.4
0.4
-6.2
73.7
-1.5
20.3
39.4
58.6
1.4
84.3

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2014-LCS. Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2014) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

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Apr 22

2023f
1.5
2.8
-1.6
4.4
2.5
5.0
1.5
2.5
1.2
1.6
4.3
-1.0
0.5
-5.9
76.6
-0.9
20.3
39.3
58.5
0.3
84.1

2024f
1.8
2.4
0.6
4.4
3.0
5.0
1.8
2.5
1.2
2.0
4.5
-1.5
0.5
-5.5
78.4
-0.3
20.0
39.1
58.3
0.1
83.8

SOUTH SUDAN
Table 1

2021

Population, million

11.4

GDP, current US$ billion

5.0

GDP per capita, current US$

437.3

International poverty rate ($1.9)

a

76.5
a

91.7

a

97.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

44.2

School enrollment, primary (% gross)

b

73.0

b

57.8

Total GHG Emissions (mtCO2e)71.0Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2011 PPPs.
b/ WDI for School enrollment (2015); Life expectancy(2019).

South Sudan’s recovery is constrained byfalling oil production and climate shocks.
Consequently, the economy is projected tocontract by 0.8 percent in FY2021/22 despite higher oil prices. Food insecurity deteriorated, and poverty is estimated to increase for the second consecutive year,
reaching 80 percent in FY2021/22. Living conditions continue to be impacted byviolence, displacement, climate shocks,
and inadequate service delivery.

Key conditions andchallenges
South Sudan is at a crossroads in its recovery, reconstruction, and development
path. Having gained independence in2011 in what was expected to be a new
dawn for the conflict-torn country, optimism was high on the back of highcommodity prices, abundant natural resources, and international goodwill.
However, weak institutions and recurring
cycles of conflict have curtailed progress.
Initial peace efforts proved futile as successive peace agreements collapsed andthe country relapsed to conflict in 2013
and again in 2016. The conflict precipitated a macroeconomic crisis and economic
decline with widening fiscal deficits, highand persistent inflation, and spiraling foreign exchange rate premia. Oil production plummeted and did not recover topre-independence levels.
Consequently, a decade after independence, South Sudan remains caught in a
web of fragility, economic stagnation, andinstability. Due to this fragility, real household incomes declined and living standards deteriorated. Poverty and food insecurity remain major concerns and havebeen reinforced by inadequate provision ofservices, infrastructure deficits, displacement, and recurring climatic shocks. In
2021, there were 2 million internally displaced persons in the country (55 per centof whom were women and girls), as compared to 1.7 million in 2020. An additional

2.3 million South Sudanese remain
refugees hosted in neighboring countries.
While the signing of the 2018 peace deal
started to bring positive economic outcomes in FY2018/2019, the COVID-19 pandemic and natural disasters halted thispositive dynamic. With lower oil exports,
government revenues, and disrupted agricultural production, the economy contracted by an estimated 5.1 percent in FY2020/
21, while 4 in 5 individuals remain under
the international poverty line. Going forward, strengthening service delivery institutions, governance, and economic andpublic financial management systems will
prove critical as the country seeks to build
resilience to future shocks, providing
building blocks for a diversified, inclusive,and sustainable growth path.

Recent developments
South Sudan faced significant headwinds in FY2020/21, with the pandemic,
floods, and violence flareups affecting
economic activities. Consequently, theeconomy is estimated to have contracted
by 5.1 percent in FY2020/21 and poverty
to increase by 2.3 percentage points.
Oil production declined by 0.3 percent,as floods affected production and the
COVID-19 pandemic delayed new investments to replace exhausted wells. In
the agriculture sector, cereal production
declined by 4 percent as flooding precipitated estimated losses of 38,000 tonsof cereals and 800,000 livestock according to FAO estimates. These events had

FIGURE 1 South Sudan / Exchange rate developments

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

SSP/USD
700

Poverty rate (%)

Percent
300

600
500

Real GDP per capita (constant LCU)

120

3500

250

100

3000

200

80

150

60

2500
2000

400

1500

300
40

100

200
100

50

0

0

1000

20

500

0
Oct-20Jan-21
Spread, % (rhs)Apr-21
Jul-21
Official XR (lhs)02009

Oct-21
Jan-22
Parallel XR (lhs)

Source: World Bank.

2011

2013

2015

2017

84

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2019

detrimental effects on household wellbeing as flooding was concentrated in areas that were already facing high levelsof food insecurity.
Inflation averaged 43 percent in FY2020/2021 (compared to 33 percent in FY2019/2020) but was on a declining path in
the first half of FY2021/2022. According
to official CPI data, the 12-month inflation rate for Juba declined to 1.6 percent in December 2021, from a peak of
93.8 percent in January 2021. This brings
some degree of relief to households amid
stalled disposable incomes. These positive developments are consistent withrecent reform efforts. The premium between the official and parallel exchange
rates has been eliminated in 2021 andmonetization of the fiscal deficit hasceased since September 2020.
The FY2021/22 budget includes a fiscal surplus equivalent to 1.1 percent of GDP, reflecting a large planned fiscal adjustment
from an estimated fiscal deficit of 6.9 percent realized in FY2020/21. However, thefinancing gap in the FY2021/22 budget isestimated at 1.8 percent of GDP, despite abudgetary drawdown of SDRs equivalent
to 2.7 percent of GDP. Due to higher oil export values, lower financial transfers to Sudan, and weaker import demand growthfor capital projects, the current accountdeficit is estimated to have narrowed to 5.5

percent in FY2020/21 from 20.3 percent in
FY2019/20. South Sudan remains at a highrisk of debt distress for both external andoverall public debt.

OutlookSouth Sudan’s economy is projected tocontract by 0.8 percent despite higher
oil prices and improving macroeconomic
conditions in FY2021/22. These developments reflect falling oil production,
which is projected to decline by 7.2 percent in FY2021/22, and the impact of climate shocks on agriculture. Nevertheless, higher budget revenues are expected to support domestic demand, withgrowth in the services sector projected to recover to 4.7 percent in FY2021/
22 from a contraction of 9.7 percent inprevious year. Over the medium-term,
growth could average around 2.5 – 4.0
percent, with developments in the nonoil sectors and a recovery in consumption being the main contributing factors. Poverty, in turn, is expected to remain stagnant at 80 percent in the coming years. Successful implementation of
the ongoing public financial management reforms and macroeconomic stabilization program, along with prudent

TABLE 2 South Sudan / Macro poverty outlook indicators

use of budgetary resources, are vital tocreate opportunities for the achievementof faster and more inclusive growth.
High frequency data indicate that foodprices started increasing in February 2022.
Nevertheless, inflation is expected to decline gradually over the medium term
and will benefit from improved fiscal andmonetary discipline, exchange rate market liberalization, and deepening publicfinancial management reforms. Non-oil
tax revenue performance is projected at
3.2 percent of GDP in FY2021/22, higher
than the 2.6 percent of GDP contained in
the FY2021/22 budget, reflecting the National Revenue Authorities’ efforts to expand the tax base and the implementation of a range of measures to strengthen
its tax administration functions.
The fiscal deficit could narrow to 2.5 percent of GDP in FY2021/22 from an estimated 6.9 percent of GDP in FY2020/21,
on the back of a strong recovery of international oil prices. In parallel, the current
account is expected to record a surplus of
0.3 percent of GDP in FY2021/22, from a
deficit of 5.5 percent in FY2020/21, reflecting higher oil export revenues, lower financial transfers to Sudan, and lower import demand for capital projects especially in the oil sector.

(annual percent change unless indicated otherwise)
2019
3.2
3.2
9.9
20.9
-12.1
63.6
-6.3
-1.7
-1.0
32.7
-0.5
79.6
92.9
98.3
1.3
2.4

Real GDP growth, at constant market prices
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
9.5
9.5
6.0
27.5
-9.6
33.3
-20.3
-0.4
-9.8
40.7
-7.8
77.0
91.9
97.9
0.5
2.1

2021e
-5.1
-5.1
-4.0
-2.3
-9.7
43.1
-5.5
0.9
-6.8
57.6
-4.4
79.3
92.7
98.2
1.9
1.8

2022f
-0.8
-0.8
-1.3
-4.0
4.7
24.0
0.3
0.9
-2.6
53.7
-0.5
80.2
93.1
98.4
3.9
1.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2016-HFS-W3.Actual data: 2016. Nowcast: 2017-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

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Apr 22

2023f
2.5
2.5
2.1
0.9
5.1
16.0
2.8
0.8
-1.8
49.2
-0.2
80.2
93.0
98.4
6.5
1.3

2024f
4.0
4.0
3.4
3.1
5.6
12.1
1.2
2.1
-3.5
44.9
-2.4
79.6
92.9
98.3
10.7
1.1

TANZANIA

Key conditions andchallenges

Table 1

2021

Population, million
GDP, current US$ billion

67.3

GDP per capita, current US$

1095.8International poverty rate ($1.9)

a

49.4
a

76.8

a

91.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

Tanzania became a lower middle-income
country in July 2020 following a long
period of sustained income growth andmacroeconomic stability. In the last two
decades, GDP growth averaged 6.5 percent annually and inflation remained low
while fiscal and current-account deficits
remained manageable. Investment was a
key driver of growth, with about threequarters coming from private sources. In
recent years, however, private investment
has declined with waning extractives FDI
and a more challenging business environment, including excessive bureaucracy, high taxes, inadequate infrastructure,and skills shortages.
The poverty impact of economic growth has
waned in recent years. High population
growth, insufficient levels of education, lowagricultural productivity, and slow and uneven creation of more productive income
earning opportunities have hindered the inclusiveness of growth. The COVID-19 pandemic has further exacerbated these challenges, reversing some of the gains in poverty reduction achieved over the last decade,especially in urban areas. The Tanzanian
government is implementing a nationwide
COVID-19 vaccination program, but thepace of vaccination remains slow.
The government will need to strengthen its
pandemic response in the short term while
laying the groundwork for a private-sector-led recovery over the medium-to-long

61.4

a

40.5

School enrollment, primary (% gross)

b

96.9

b

65.5

Total GHG Emissions (mtCO2e)

191.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

The Tanzanian economy is on a gradual
recovery path. GDP growth increased
from 2.0 percent in 2020 to an estimated 4.3 percent in 2021. As employment
and nonfarm business revenues recover,the poverty rate should fall slightly in
2022. Continued recovery hinges on easing pandemic conditions and supportive
private sector policies, but faces risks
from an uncertain external environment.
Policy priorities should be to strengthen
pandemic response while laying the
groundwork for inclusive private-sectorled growth.

term. Priority policy actions should focus
on saving lives, protecting poor and vulnerable households, attracting new foreignand domestic investment, supporting an
employment-intensive and resilient recovery, and expanding the available fiscal
space while maintaining debt sustainability. Achieving Tanzania’s development vision of becoming a successful middle-income country by 2025 will require the government to revise, strengthen, and expand
its existing efforts to support struggling
firms while implementing structural reforms to address longstanding constraints
on private investment and women’s accessto economic opportunities.

Recent developments
High-frequency indicators suggest that economic activity is gradually recovering. The
accommodation and restaurants, mining,and electricity sectors drove a sharp rebound of 5.2 percent in quarterly GDP during Q3 2021. Leading indicators such as cement production, electricity generation,
private-sector credit, goods and services exports, nonfuel goods imports, telecommunications, mobility, and tourist arrivals all
improved in 2021, though activity in most
sectors remains below pre-pandemic levels.
Meanwhile, the preliminary findings froma recent survey suggest that by the end of2021, the proportion of heads of householdindicating they were working was higher
than the pre-pandemic level by about 5 percentage points, with stronger recovery formen than for women. As a result, the WorldFIGURE 1 Tanzania / Real GDP growth forecasts underalternative scenarios

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

Percent change

Poverty rate (%)

7

100

800

90

700

6

6.1

5.8

80

5.7

5.4
4.3

4

600

70

5.3

5

Real GDP per capita (constant LCU)

60

500

50

400

40

300

30

3

200

20

2

100

10

2.0

0

0
2009

1
2018

2019

2020

2021e

2022p

2023p

2024p

Sources: World Bank Staff Estimates and Projections (2018-2024).

2011

2013

2015

2017

86

Apr 222021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: See table 2.

MPO

2019

Bank estimates a real GDP growth rate of 4.3
percent. Inflation remained low and stableaveraging 3.7 percent in 2021 but increased
to 4.0 in January 2022, largely driven byhigher energy prices.
Tanzania’s current-account deficit has
widened slightly to 2.0 percent of GDP at
end-September 2021, as imports grewfaster than exports. The current-accountdeficit was funded largely by externalloans and, and to a lesser extent, by foreign
direct investment. The Tanzanian shillingremained relatively stable against the currencies of major trading partners in 2021.
Gross official reserves increased to about
US$6.7 billion by end-October 2021.
The fiscal deficit, which was largely funded by increased domestic borrowing, expanded to 4.2 percent of GDP in 2020/21 asa result of significant shortfalls in revenue.
The public and publicly guaranteed debt
stock remained relatively low at US$29.6
billion (40.6 percent of GDP) in October
2021 and interest payment consumes
about 12 percent of domestic revenue. The
latest joint IMF-World Bank Debt Sustainability Analysis, conducted in September
2021, concluded that Tanzania’s risk of external debt distress had increased from
low to moderate.
The GDP per capita growth rate is estimated at 1.3 percent in 2021, following a 1.0
percent of per capita GDP contraction in
2020. Meanwhile, the national poverty rateis estimated to have declined marginallyfrom 27.1 percent in 2020 to 27.0 percent
in 2021, driven by the recovery of employment and agricultural growth.

Outlook
Tanzania’s real GDP growth rate is projected to reach 5.3 percent in 2022 assuming
continued easing of pandemic conditions
and implementation of supportive policies
for the private sector, but risks from an uncertain external environment have increased. The current-account deficit is projected to widen to 3.9 percent of GDP in 2022
due to rising imports (capital goods and oil),which will more than offset an expected increase in exports. The fiscal deficit is projected to widen to 3.7 percent of GDP in 2022,
driven by pandemic-related public spending and the implementation of several major capital projects, including SGR and the
Nyerere Hydro Power Project.
Under alternative scenarios, real GDP is
expected to grow by between 4.5 and 5.5
percent in 2022, below its long-run potential growth rate of about 6 percent. Tanzania’s vulnerability to the global pandemic remains high amid the slow vaccination
rollout. Additionally, the Russia-Ukraine
conflict would affect Tanzania through thecommodity prices channel, which could

TABLE 2 Tanzania / Macro poverty outlook indicators

result in inflationary pressures and expanded current and fiscal deficits. An accelerated domestic vaccination program,increased regional trade and cooperation,and policy reforms designed to improvethe business environment and support thegrowth of the private sector have somewhat mitigated downside risks, but the
emergence of new coronavirus variants,
reduced capital flows, elevated debt levels,
persistent inflationary pressures, supply
bottlenecks, and the Russia invasion andassociated sanctions continue to threaten
the projected recovery.
The international poverty rate is projected
to fall by more than a percentage point to48.6 percent in 2021 and drop to below thepre-crisis level. But to sustainably reducepoverty, and lower the number of poor
people, the recovery must create morejobs, including for low-skilled workers, enable small enterprises growth, and foster
productivity of agriculture, on which
three-quarters of poor households depend.
Inflation driven by higher energy andgrain prices caused by the Russia-Ukraine
crisis could undermine purchase power,with the poor and the urban consumers
being particularly vulnerable to food pricerises putting poverty reduction at risk. The
government will need to carefully monitor
the impact of price rises on low-income
groups and expand the TASAF social safety net to affected population groups.

(annual percent change unless indicated otherwise)
2019
5.8
3.1
2.3
8.0
19.0
-1.4
5.8
3.5
10.3
4.2
3.5
-2.3
2.0
-2.2
38.3
-0.5
49.3
76.7
91.8
3.0
21.3

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
2.0
1.0
7.4
2.4
-8.6
-7.6
2.0
3.1
2.5
0.9
3.4
-1.6
1.1
-2.0
38.7
-0.3
50.4
77.5
92.1
2.5
21.9

2021e
4.3
3.9
10.9
7.5
2.2
13.3
4.3
3.5
6.5
3.0
3.7
-2.9
1.0
-3.5
38.8
-1.7
49.8
77.1
92.0
3.1
22.7

2022f
5.3
5.2
6.2
8.2
5.2
12.6
5.3
3.8
7.6
4.4
4.5
-3.9
1.3
-3.7
39.0
-1.9
48.6
76.3
91.6
2.9
23.2

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-HBS. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 1 based on private consumption per capita in constant LCU.
MPO

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Apr 22

2023f
5.7
3.9
3.6
8.0
7.5
6.3
5.7
4.1
8.2
4.6
4.2
-3.6
1.4
-3.2
39.1
-1.3
48.0
75.8
91.4
3.3
23.7

2024f
6.1
3.5
3.3
8.9
7.6
5.2
6.1
3.9
8.6
5.4
4.0
-3.1
1.6
-2.5
38.8
-0.6
47.6
75.5
91.3
3.2
24.1

TOGO

Key conditions andchallenges

Table 1

2021

Population, million

8.5

GDP, current US$ billion

8.0

GDP per capita, current US$

940.1

International poverty rate ($1.9)

a

24.1
a

51.8

a

78.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
National GINI (2018/19)

38.1

School enrollment, primary (% gross)

b

126.3

b

61.0

Total GHG Emissions (mtCO2e)9.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

Growth rebounded to pre-crisis levels in
2021, reflecting health measure rollbacks
and a global recovery. Growth is expected to stabilize in 2022 and strengthen
in the medium term, supported by investment and consumption, while poverty should decline. New debt management and revenue mobilization measures
should create fiscal space. Risks include
slower global growth and higher inflation due to the impact of the Ukraine
conflict, regional insecurity, debt vulnerabilities, and climatic shocks.

Togo experienced a robust economic
growth prior to the COVID-19, but with
only limited impacts on living standards
and poverty. Growth averaged 5 percent
between 2017-19 (2.4 percent in per capita terms), driven by private investment
as the business climate improved. Prudent fiscal management underpinned
growth and helped reduce debt vulnerabilities. However, growth did not translate into higher living standards, i.e. access to electricity and safe drinking water
were 52.2 percent and 60.3 percent respectively in 2018/19, whereas in rural areas these were only 27.2 percent and 44.5
percent, respectively.
COVID-19 disrupted growth, fiscal consolidation, and poverty reduction. It
heightened the urgency to deal with major development challenges and to revert
toward the WAEMU fiscal target to contain debt vulnerabilities. Structural reforms to improve infrastructure, notably
in energy and telecommunications, governance and customs procedures would
help Togo harness its potential as a transport and logistics hub. Digital technology
also presents untapped opportunities forinnovation in key economic sectors despite large inequalities in access: the shareof the population aged 15 years or older
with access to the internet was 6 percent
and 35 percent, respectively, among thepoor and the nonpoor.

FIGURE 1 Togo / Evolution of fiscal indicators

Government balance (Percent of GDP)

Despite the ongoing recovery, theUkraine conflict could further increase
food/fertilizer and energy price inflationand is a threat to poverty reduction andcould lead to increased social tensions.
According to a household survey realized
by the National Statistics Office, over 30
percent of Togolese households were unable to access main staple foods whenneeded, with poor and rural households
disproportionately affected (40 percent of
the poor and 43 percent of the rural
households). Heightened regional insecurity could trigger higher security spending and increase fragility in the north.
Other risks include domestic debt vulnerabilities and weather shocks, which could
negatively affect agricultural production.

Recent developments
After decelerating to 1.8 percent in 2020,
growth rebounded in 2021 to 5.1 percent(2.7 percent per capita). The global economic recovery enabled export expansion,and domestic activity rebounded following containment measure abatements. Private consumption picked-up, benefittingfrom increases in business activity and labor income (6.5 percent). Growth was partially offset by rising inflation, at 4.3 percent in 2021, as higher consumption demand and supply chain disruptions raised
food and energy prices.
The current account deficit widened to
3.2 percent in 2021, more than doublingits 2020 level. Increases in imports outpaced exports due to import growth

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

Public debt (Percent of GDP)

Poverty rate (%)

2

66

100

1

64

90

0

Real GDP per capita (constant LCU)
700000600000806270

500000-26060400000

-3

58

50

-4

56

-1

-5

54

-6
-7
-8

2019

2020

Fiscal Balance (lhs)

2021

2022

2023

Primary Balance (lhs)

2024

40

30000030200000

20

52

10

50

0

10000002006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Debt (rhs)

Sources: INSEED and World Bank staff estimates.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Note: See table 2.

MPO

88

Apr 22from increasing domestic demand from
infrastructure projects and increases inprivate consumption.
The fiscal deficit remained high at 6.5 percent of GDP in 2021. Tax revenues rebounded in 2021, reflecting an improvement in economic conditions and new tax
measures (digitalization of tax administration and tax registries), but remained below pre-crisis levels. Expansionary public
spending continued with the implementation of an ambitious investment program.
Reliance on external financing continues tocover the fiscal deficit. Public debt increased from 60.3 percent of GDP in 2020
to 64.7 percent in 2021. The risk of external
debt distress remains moderate, while therisk of overall debt distress was high.
Togo’s monetary and exchange rate policies are managed by the BCEAO, which
maintains a peg between the CFA Francand the Euro. Reserves reached 5.8
months of imports in 2021, due to a recovery in exports, an SDR allocation, andportfolio inflows.
Poverty remains high and concentrated inrural areas. The national poverty incidence
was 45.5 percent in 2018-19 (749.6 CFAF/day), while extreme poverty was 23.15 percent (US$1.9 2011 PPP/day) in 2019. Poverty projections estimate that extreme poverty rate maintained at 23.2 percent between
2019 and 2020. Despite steady extreme
poverty, the pandemic probably pushedsome households into poverty: simulations
show an increased poverty of about 4 percentage points, disproportionately affecting urban populations.

OutlookReal GDP is projected to stabilize at 5 percent in 2022, 2.6 percent in per capita
terms, and accelerate over 2023-24. Downward revisions to the forecasts in 2022
mainly reflect the negative impacts of the
Ukraine conflict, through higher energy
and food prices, lower public investment
as authorities allocate more resources totransfers to the poorest, and lower private
investment because of higher uncertainty.
Growth should still be supported by the“Togo 2025 Roadmap” public investments,
before gradually giving way to private investment following positive business climate developments, but a changing global
policy environment creates significant uncertainty around the investment climate.
The current account deficit will keep deteriorating, reaching 6.4 percent of GDP in
2022, as rising import demand from increased consumption and investment outpaces export growth.
The fiscal deficit is projected to gradually
decline from 5 percent of GDP in 2022.
Current forecasts indicate meeting theTABLE 2 Togo / Macro poverty outlook indicators

WAEMU convergence criteria in 2024, withdelays to 2025 if additional expenditure requirements materialize. Revenues should
rise with GDP growth, supported by improvements in revenue management andtax holiday expirations. Total expenditure
as a percent of GDP will decrease startingin 2023, as counter-cyclical pandemic
spending winds-down. Public debt will
decrease to 64 percent of GDP in 2022, declining over the medium-term as growth
outpaces a declining primary fiscal deficit,
to almost reach 60 percent in 2024.
WAEMU reserves will decrease to around
5.5 months of imports in 2022 and 5.3 in
2023/24, reflecting fast growth in imports
and a reduction in net capital inflows (as apercent of GDP), with uncertainty aroundglobal monetary policy. Growth-friendly
fiscal consolidation and implementation of
structural reforms will be key to maintaining reserves at an optimal level.
Extreme poverty declined to 22.4 percent
in 2021 (-0.9 percentage points from2020), as food prices remain high. Extreme poverty should decrease by one
percentage point to 21.4 percent in 2022
and decrease in the medium-term, supported by the scaling-up of Government
cash transfer programs. Inclusive servicesector programs and agricultural growth
will be needed for inclusive and sustained poverty reduction.

(annual percent change unless indicated otherwise)
2019
5.5
3.0
-2.9
20.2
1.0
1.2
4.4
1.9
6.5
4.5
0.7
-0.8
-4.2
-0.9
52.4
1.2
23.2
50.6
76.9
1.9
29.7

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
1.8
-4.9
21.1
13.7
3.6
4.1
1.9
4.0
0.8
1.5
1.8
-1.5
-0.2
-6.9
60.3
-4.6
23.2
50.9
77.2
1.4
27.8

2021e
5.1
5.3
6.4
8.9
12.0
13.8
5.1
6.0
6.8
4.0
4.3
-3.2
-0.3
-6.5
64.7
-4.0
22.4
49.8
76.5
3.3
26.6

2022f
5.0
5.5
0.2
12.9
7.0
10.5
4.9
5.6
7.3
3.4
6.0
-6.4
-0.4
-5.0
64.0
-2.6
21.4
48.7
75.5
3.6
25.4

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2018-EHCVM. Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2018) with pass-through = 0.7 based on GDP per capita in constant LCU.
MPO

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Apr 22

2023f
5.8
7.1
7.0
2.7
6.5
6.9
5.9
3.6
5.6
7.1
4.0
-7.3
-0.5
-4.0
62.7
-1.5
20.2
47.3
74.1
4.2
24.3

2024f
6.4
7.4
8.9
2.5
5.5
6.1
6.4
5.9
7.3
6.2
2.0
-6.3
-0.6
-3.1
60.5
-0.6
19.2
45.7
72.9
4.4
23.3

UGANDAKey conditions andchallenges

Table 1

2021

Population, million

47.1

GDP, current US$ billion

34.6

GDP per capita, current US$

733.9

International poverty rate ($1.9)

a

41.0
a

70.5

a

89.0

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

42.7

School enrollment, primary (% gross)

b

102.7

b

63.4

Total GHG Emissions (mtCO2e)75.8Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2011 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2019).

Real GDP growth is expected to rise from
3.4 percent in FY21 to 3.7 percent in
FY22, as the economy reopens. The
planned reduction in the fiscal deficit, to
3.5 percent of GDP by FY24, augurs wellfor debt sustainability. Growth is expected to average 5.7 percent in FY23 andFY24, given the elevated trade, inflation,and investment risks from the RussiaUkraine crisis. Poverty should fall as incomes recover.

Compared to the strong performance inthe 2000s, recent economic growth has
slowed considerably. With reduced reform
momentum, a less supportive external environment, and other exogenous shocks
like droughts, growth since 2011 has barely surpassed the high population growthrate. As a result, in the five years prior to
the COVID-19 crisis, per capita real GDP
growth halved to 1.1 percent on average
per year.
Structural transformation is key for
growth and poverty reduction. However,most of the workforce remains in low productivity jobs, and total factor productivity
growth has been negative. Whereas theservices sector contributes to a large shareof growth, many jobs are informal andlow-skilled. Instead, the majority of thepoor rely heavily on agriculture and remain vulnerable to climate change andweather shocks. Although there were positive signs leading into the COVID-19 crisis– including a decline in poverty, reductionin the workforce employed in agriculture,
take-off in agro-processing, and expansionof the services sector – some of this has
been reversed, and poverty and inequality
have increased.
As Uganda moves towards oil production, achieving structural transformation
will require changing the growth modeland role of the state. The current modelof debt-financed public spending –FIGURE 1 Uganda / Fiscal adjustment

which emphasizes infrastructure andhas crowded out private sector borrowing – needs to be replaced with one
where the private sector drives growth.
The state can then provide support
through a better balance of investments
in human capital and infrastructure,alongside targeted regulations to promote inclusive growth that reduces inequality and ensures sustainability. The
prospects for this shift will also rely
on maintaining macroeconomic stability;
better supporting the vulnerable, farmers, and small enterprises; increasing theuptake of digital technologies; and more
effective use of public resources.

Recent developments
Uganda’s recovery slowed after the second
COVID-19 wave and lockdown in
mid-2021. Although Omicron introduced
some uncertainty, the economy has sincerebounded, with the PMI increasing forthe seventh successive month to a high of
55.7 in February 2022. Economic conditions continue to improve, buoyed by thereopening of schools, lifting of all mobility
restrictions, and a milder third wave of infections. Over 5 of the 22 million target
population (aged 18+) were fully vaccinated by mid-February 2022.
Despite the economic rebound, inflation
has been modest, which has allowed thecentral bank to maintain the policy rate at
6.5 percent to support the recovery. Lending rates remain high though, thereby
slowing growth in private sector credit. An

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

Percent of GDP
16

Poverty rate (%) Real private consumption per capita (millions constant LCU)

Percent of GDP
60

14

100

3

90

50

80

12
40

10

2

70
60

8

30

6

40

20

1

30

4

20

10

2

2

50

1

10

0

0
2019

2020

Public debt (rhs)

2021

2022f

2023f

Primary fiscal deficit (lhs)

0

2024f

0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Tax (lhs)

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

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real priv. cons. pc

Source: World Bank. Notes: see Table 2.

90

Apr 22

uptick in annual headline inflation to 3.2
percent in February was anticipated, given
the reopening of the economy and sudden
increase in demand.
Whilst gold imports and exports havestalled in the first half of FY22 – due toa new FY22 tax levy on gold exports –coffee exports are up over 60 percent andtourist receipts in early FY22 were approaching pre-COVID levels. This bodes
well for an improvement in the current
account deficit compared to the sharp deterioration in FY21.
In line with government’s consolidation
agenda, the fiscal deficit has narrowed toan estimated 5 percent of GDP in the firsthalf of FY22, driven by cuts to lower priority recurrent spending (e.g. travel andworkshops) and delaying investments thatare not critical or ready.
With lower consumption growth – due toreduced remittances, limited credit, andjob losses – poverty increased from 27.5
to 32.7 percent (using Uganda’s official
upper poverty line) after the first lockdown in 2020. Employment rates fell
again after the second lockdown, accompanied by increased food insecurity andsignificantly lower revenues for non-farmhousehold enterprises.

OutlookGiven a more positive COVID-19 and vaccine outlook, and the recent signing of the
final investment decision in the oil sector,
growth was projected to accelerate to an
average of over 6 percent in FY23 andFY24. Following Russia’s invasion of
Ukraine, this average will likely drop to
below 6 percent and possibly lower, given
the trade disruptions, higher commodity
prices, and increased risk aversion that
may slow investments. Costlier inputs (e.g.
fertilisers and transport) will also posechallenges for agricultural production,
food security, and household incomes thatare still recovering.
The combination of pent-up domestic demand – as economic activity picks up –and increasing commodity prices will exert additional pressures on prices, which
could raise inflation above the official
target of 5 percent over the next year.

TABLE 2 Uganda / Macro poverty outlook indicators

Inflationary and exchange rate pressures
may then induce monetary policy tightening, which would constrain the private
sector recovery.
The decline in the fiscal deficit will be driven by expenditure cuts (Figure 1), as measures to enhance revenues will take longer
to pay off. This adjustment will ultimately
shift debt to a more sustainable path –peaking at around 54 percent of GDP in
FY23 – and limit private sector crowding
out. Nonetheless, debt vulnerabilities will
persist if spending pressures remain, newshocks arise, or reliance on non-concessional and/or domestic debt continues.
Even with stronger growth in the mediumterm, per capita GDP will remain below
the NDPIII target. As a result, zero growthis projected in private consumption percapita, which will keep the international
poverty rate at about 41 percent in 2022.
Accelerated growth may reduce poverty to
39.3 percent by 2024, but this will dependon how COVID-19 evolves, how long Russia’s invasion continues, the pace of foodinflation, and any environmental shocks
that adversely affect households due totheir limited adaptive capacity.

(annual percent change unless indicated otherwise)
2019
6.4
5.9
6.9
9.9
6.3
8.6
6.4
5.2
9.0
5.6
2.6
-7.1
3.5
-4.9
36.6
-2.8
41.0
70.5
89.0
2.5
31.9

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
3.0
2.0
7.9
-0.1
-1.2
-5.4
3.0
4.6
3.1
2.2
2.3
-6.7
2.6
-7.1
40.4
-4.8
41.5
71.0
89.2
1.8
31.3

2021e
3.4
4.2
6.1
5.1
2.6
8.6
3.4
3.8
3.4
3.3
2.5
-10.2
2.1
-9.5
49.6
-6.8
41.1
70.6
89.1
2.8
31.0

2022f
3.7
2.8
0.9
4.1
11.1
5.3
3.7
3.4
2.6
4.6
3.7
-8.2
2.5
-7.5
52.5
-4.4
41.0
70.6
89.1
3.9
31.4

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2019-UNHS.Actual data: 2019. Nowcast: 2020-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2019) with pass-through = 0.7 based on private consumption per capita in constant LCU.

MPO

91

Apr 22

2023f
5.1
4.4
-0.6
7.0
12.4
8.4
5.1
3.6
6.8
4.9
6.0
-7.9
2.7
-4.7
53.5
-1.9
40.3
70.1
88.9
4.0
31.9

2024f
6.5
4.6
0.7
10.5
13.3
8.6
6.5
4.0
7.9
6.9
5.0
-7.0
3.3
-3.5
52.4
-0.7
39.3
69.4
88.5
4.1
32.4

ZAMBIAKey conditions andchallenges

Table 1

2021

Population, million

18.9

GDP, current US$ billion

21.2

GDP per capita, current US$

1120.6

International poverty rate ($1.9)

a

58.7
a

75.4

a

88.1

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

57.1

School enrollment, primary (% gross)

b

98.7

b

63.9

Total GHG Emissions (mtCO2e)

99.2Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2015), 2011 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2019).

The Zambian economy grew by an estimated 3.6% in 2021 following a 2.8%
recession in 2020; bolstered by firmer
copper prices, favorable external demand, good rainfall, and post-election
market confidence. However, poverty remained high, at about 60%, reflecting
the impact of the COVID-19 crisis.
The medium-term outlook, while positive, faces downward risks from prolonged debt negotiations, low
COVID-19 vaccination rates, and theimpact of the Russia-Ukraine war.

The Zambian economy remains structurally fragile and vulnerable to external
shocks. The economy was already weak
before the COVID-19 crisis, with declining
growth, increasing inflationary pressures,a tightening fiscal space and weak externalbalances.
Thepublic-investment-led
growth model that relied heavily on debt
financing did not deliver sustained economic growth or poverty reduction. As aresult, Zambia’s public debt became unsustainable by 2019. The onset of the
COVID-19 crisis unraveled these structural
weaknesses and amplified existing macroeconomic vulnerabilities. The country has
had persistently high poverty rates. Poverty in Zambia is concentrated in rural areas– where 80% of the poor reside. In contrast,
the recent surge following the COVID-19
pandemic has disproportionately comefrom urban households.
The key challenge for Zambia is to restore macroeconomic stability and debt
sustainability and to return to an economic growth path that uplifts more
Zambians out of poverty. Resolving thesevere macroeconomic imbalances thatbuilt up over the past decade and culminated into a debt crisis will require
a combination of ambitious fiscal adjustment, structural fiscal reforms, and public
debt restructuring. The new administration, elected to office in August 2021,
has shown willingness to undertake someof these significant economic reforms, including to improve the efficiency and inclusiveness of public spending and promoting a private sector-led and exportoriented growth path. To bear fruits on
debt sustainability and growth, these reform efforts will need to be complemented by comprehensive and timely debt restructuring. In early 2021, Zambia asked
for debt treatment under the G-20 Common Framework (CF) to help restore
public debt to sustainable levels.

Recent developments
Economic activity picked up in 2021 withGDP growth at an estimated 3.6% per annum, reflecting recovery from initial
COVID-19 shocks and lockdown measures, post-election market confidence,and improved global copper price outlook.
Monetary policy stance tightened by a cumulative 100 basis points during the year,
as the central bank balanced between responding to persistently high inflationarypressures and weak aggregate demand.
Despite stronger revenue performance,
the fiscal outturn was more expansionary than planned, resulting in a deficit(on cash basis) of over 10% of GDP.
Domestic revenues performed better on
account of favorable copper prices andimproved non-tax revenue collection.
However, this was outweighed by expenditure overruns in the run-up to theelections, including in goods and services, and agriculture and fuel subsidies. The large deficit was financed by

FIGURE 1 Zambia / Developments in the current accountbalance (2013-21)

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

Percent of GDP
60

Poverty rate (%)

50

95

Real GDP per capita (constant LCU)

100

8500
8000

90

40

85

7500

30

80

7000

20

75

10

70

6500

65

6000

0

60

-10

55
2013

2014

2015

Export of goods
Copper exports
Current account

2016

2017

2018

2019

2020

2021

5500

50

Imports of goods
Non-traditional exports

5000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Sources: Zambian authorities and World Bank staff estimates and projections.

MPO

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see table 2.

92

Apr 22

further accumulation of domestic arrears
and increased domestic borrowing.
On the external sector, strong growth inexports outpaced the rebound in imports
resulting in a large trade surplus and a current account surplus of 7.7% of GDP in
2021. The Kwacha appreciated by 21% in
2021, reflecting an improved reserve position from the new IMF SDR allocation,high post-election consumer and investor
confidence, and increased portfolio inflows from non-resident holders of domestic sovereign debt. However, the continued
weak fiscal position saw Zambia continue
to accumulate external debt service arrears, which amounted to $1.8 billion at
end-September 2021.
The effects of the pandemic on poverty
and vulnerability have continued in 2021.
After an estimated 1.5 percentage point
increase in the international poverty rate
between 2019 and 2020, the poverty headcount is projected to have remained stagnant at 60% in 2021, with GDP per capita
growth projected to be at only 0.7% in
2021. The rise in poverty has been largely
driven by falling incomes in urban areas,
especially among those relying on employment income from the informal sector. A World Bank Household Monitoringphone survey found that 4 in 5 house-holds reported a drop-in income from
nonfarm business, and that 1 in 3 reported a reduction or disappearance of wages
due to the pandemic. Job losses have been
particularly severe in the tourism, manufacturing, and services sectors. Food security indicators are also of increasing concern. A recent Socio-economic Impact Assessment conducted by the National Statistical Office found that 9 in 10 households have experienced spikes in theprice of food, and that 64% of these had
to reduce food consumption as a result.

Outlook
Growth is projected to pick up over the
medium-term, averaging 3.8% in 2022-24,
buoyed by an improved macroeconomic
environment; a positive copper price outlook and stable and predictable mining
policy environment; and improved electricity supply supported by new generation capacity at Kafue Gorge. The outlook
is anchored on government’s implementation of the macro-fiscal reforms outlined
in its 2022-24 medium-term budget plan,
aimed at restoring fiscal sustainability andcredibility, re-orienting expenditure away

TABLE 2 Zambia / Macro poverty outlook indicatorsfrom inefficient subsidies to more social
spending (education, health, and social
protection), and bringing public services
closer to the communities. Implementationof structural reforms aimed at removing
market distortions and bringing financial
sustainability in the energy sector (electricity and petroleum), improving transparency, and fighting corruption, will also be
critical to achieving this growth path. It
also assumes normal rainfall patterns andtimely completion of the debt restructuring process. The pace of poverty reduction,
however, is expected to remain slow. At
current growth rates, the poverty rate will
fall by less than a percentage point by 2024.
Risks to the baseline outlook are tilted
downwards. A sustained upward trajectory in global copper prices will boost copper production, domestic revenue, and external stability. However, delays in concluding the debt restructuring process andrisks of any COVID-19 resurgence given
the low vaccination rates could dampen
market confidence and perpetuate an uncertain economic environment. Moreover,the impact of the Russia-Ukraine war on
global oil and fertilizer prices presents key
risks to Zambia’s economic recovery andreform efforts.

(annual percent change unless indicated otherwise)
2019
1.4
2.3
-10.1
-14.3
-7.2
-13.7
1.5
7.7
-3.3
3.5
9.1
0.6
-0.6
-9.6
87.8
-5.6
58.6
75.3
88.0
-1.8
11.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-3.0
3.1
10.8
-35.8
10.7
-10.7
-2.5
17.2
0.6
-6.2
15.7
12.8
-1.1
-11.0
86.2
-7.7
60.1
76.4
88.8
2.0
11.5

2021e
3.6
3.6
3.6
-15.9
24.3
17.4
3.6
14.2
1.8
3.2
22.1
10.7
1.9
-10.3
77.6
-7.0
59.9
76.2
88.6
3.2
10.8

2022f
3.3
4.5
-6.1
44.0
-3.9
14.3
3.3
3.0
3.3
3.3
13.0
3.7
2.4
-7.8
74.9
-4.3
59.9
76.2
88.6
2.6
10.6

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2015-LCMS-VII. Actual data: 2015. Nowcast: 2016-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2015) with pass-through = 0.7 based on GDP per capita in constant LCU.

MPO

93

Apr 22

2023f
3.6
4.5
13.7
6.6
6.9
13.1
3.6
4.0
3.5
3.6
10.0
4.3
2.3
-5.5
99.2
-2.9
59.7
76.0
88.6
2.9
10.8

2024f
4.0
4.5
7.2
2.4
6.9
7.5
4.0
4.0
3.9
4.0
9.7
4.1
2.1
-4.6
114.2
-2.4
59.3
75.8
88.5
2.6
11.0

ZIMBABWE

Key conditions andchallenges

Table 1

2021

Population, million

15.1

GDP, current US$ billion

26.2

GDP per capita, current US$

1737.2

International poverty rate ($1.9)

a

39.5
a

63.8

a

82.8

Lower middle-income poverty rate ($3.2)
Upper middle-income poverty rate ($5.5)
Gini index

a

50.4

School enrollment, primary (% gross)

b

97.3

b

61.5

Total GHG Emissions (mtCO2e)

116.1

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2019), 2011 PPPs.
b/ WDI for School enrollment (2020); Life expectancy(2019).

GDP growth is estimated to have rebounded to 5.8 percent in 2021, reflecting
an exceptionally good harvest and relative
stabilization of prices. Disinflation policies were effective in bringing down inflation to double digits for the first time in
two years. As a result, poverty levels declined. The economy is projected to continue to recover in 2022, albeit at a slower
pace, as agriculture conditions worsen
and food and fuel prices surge.

Macroeconomic challenges and natural
disasters have kept Zimbabwe’s growthvolatile. High inflation, unstable exchange
rates, and unsustainable debt have constrained macroeconomic stability and productivity growth. Trade integration has
declined, and foreign direct investment(FDI) remained low, limiting transfer of
new technologies and investment in modernizing the economy. After almost three
years of droughts, favorable rains boosted
economic growth in 2021, supporting therecovery. Steps to stabilize prices and exchange rates, as well as relaxation of
COVID-19 restrictions, improved the environment for doing business. As a result,after two years of recession, Zimbabwe’s
economy is estimated to have grown by 5.8
percent in 2021.
The extreme poverty rate has increased
steadily between 2011 and 2020, only declining in 2021 following exceptionally
good harvest and disinflation policies. International poverty rate was 22 percent in2011, and it was estimated to be 41 percent
in 2021 and 40 percent in 2022. Althoughpoverty remains an overwhelmingly rural
phenomenon, in recent years it has increased relatively faster in urban areas,
leading to an urbanization of poverty.
Zimbabwe’s international poverty rate
(PPP $1.90/person/day) was half the levelin sub-Saharan African in 2011 but by 2019,it was on par with the rest of the continent(42 percent). Inequality has also increased
over the last decade, with the Gini coefficient increasing from 42 in 2011 to 50.3 in2019 – among the highest in the world. Unemployment remained high at 19.1 percent
in 2021.
In addition to further efforts to solidify
macroeconomic stability, Zimbabwe’s recovery needs to be underpinned by policies promoting productivity growth.
These policies would include reducing
state intervention in the economy, lessening the regulatory burden, strengthening governance and anti-corruption efforts, lowering barriers to regional tradeintegration, and removing forex retention
requirements. Service delivery needs tobe strengthened and household vulnerability reduced through robust social safety net programs.

Recent developments
The economy rebounded in 2021 driven
by recovery of agriculture and industry
and relative stabilization of prices and exchange rates. GDP is estimated to havegrown by 5.8 percent in 2021 after contracting by 6.2 percent in 2020. An exceptionally good agriculture season, coupledwith slowing inflation and higher remittances boosted domestic demand. Relaxed pandemic restrictions, good vaccination levels, and favorable terms oftrade supported stronger industrial production and exports, with exports of minerals expanding by over 51 percent in ayear. A widening of the current account

FIGURE 1 Zimbabwe / Exchange rates

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

ZWL$/US$250

Poverty rate (%)

200

Real GDP per capita (constant LCU)

90

16000

80

14000

70

12000

60
150

10000

50

8000

40
100

50

0
Jan-20

6000

30
20

4000

10

2000

0
May-20
Sep-20
Official exchange rate

Jan-210
2011

May-21
Sep-21
Jan-22
Parallel market exchange rate

Sources: Zimstat and World Bank staff estimates.

2013

2015

2017

2019

2021

2023

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank calculations using data from Zimstat PICES surveys 2011,2017 and mini-PICES 2019.
MPO

94

Apr 22

surplus in 2021 and the SDR allocation
helped increase international reserves.
Disinflation policies were effective inbringing down inflation in 2021. Inflation
slowed from 838 percent in July 2020 to60.7 percent in December 2021. Monetary
policy was further tightened in the end of2021 and in early 2022 to calm inflationarypressures from continuing distortions in
the foreign exchange market and rising international prices.
Fiscal policy remained relatively tight,
with most of the additional spending financed by SDRs. The fiscal balance turned
into a cash deficit of 1.5 percent of GDP.
Procurement of vaccines and higher
spending on agriculture and public infrastructure contributed most to the fiscal
deficit. Revenue collection improved, driven by better performance of corporate income tax, VAT, and money transfer tax.
Public indebtedness worsened further as
the government assumed RBZ’s legacy
debt, adding over US$2.5 billion to external arrears and external debt reachedUS$14.5 billion.
Poverty levels decreased, reflecting the
bumper maize harvest of the 2021 season.
After peaking at 43 percent, in 2020, international poverty rate fell to 41 percent in
2021. The decline in poverty is primarily
driven by rural areas thanks to the bumper

harvest of 2021. There was also a marked
improvement in food security, with theshare of population in severe or moderate
food insecurity falling from 61 to 38 percent between March and November 2021.
The lack of improvement in the extreme
poverty rate in urban areas suggests that
despite the reopening of the economy andloosening of mobility restrictions, intermittent closures continue to affect employment, incomes, and livelihoods of urban
residents. Social assistance programs playa limited role in reducing poverty and vulnerability due to their low coverage andlack of poverty focus in targeting.

Outlook
The economy is projected to continue torecover in the medium term, amid downside risks. GDP is projected to grow by
3.7 percent in 2022 but slowdown in themedium term as the positive base effects
diminish. The downward revision to thegrowth outlook is based on worsening
agriculture conditions as well as global
price increases and supply side disruptions due to the conflict in Ukraine andassociated sanctions on Russia. Agriculture output is set to contract by 1.5 per-TABLE 2 Zimbabwe / Macro poverty outlook indicatorscent in 2022 from double digit-growth in
2021 on the account of falling rain levels and rising prices of key agriculture
inputs. Mining production and exports
are expected to benefit from continuing
high international prices while tourism,
trade, and transport are likely to start
recovering with positive spillover effects
on other sectors of the economy. The
risks to the outlook are significant withheightened global risks as global growthslows down and uncertainty about the
pandemic remains. Domestic risks also
weigh on growth performance and arelinked to climatic shocks, expansionary
fiscal and monetary policy in the run
up to the 2023 parliamentary elections
that might undermine disinflation policies and keep large distortions in the foreign exchange market, thereby delaying
economic recovery.
Poverty levels are expected to further decline in 2022, albeit marginally. As conditions for a good harvest deteriorate, prices
remain high, and the capacity of the social
system to target and reach the poor withadequate social safety nets is constrained.
If inflation is not adequately managed, thepurchasing power of incomes will be eroded, putting more people in or at risk ofpoverty and delaying improvements in basic service delivery.

(annual percent change unless indicated otherwise)
2019
-6.1
-19.9
-1.7
-9.0
29.7
-29.5
-7.5
-17.8
-11.1
-2.1
255.3
4.6
-1.2
0.2
94.8
0.4
39.5
63.8
82.8
-1.6
12.6

Real GDP growth, at constant market prices
Private Consumption
Government Consumption
Gross Fixed Capital Investment
Exports, Goods and Services
Imports, Goods and Services
Real GDP growth, at constant factor prices
Agriculture
Industry
Services
Inflation (Consumer Price Index)
Current Account Balance (% of GDP)Net Foreign Direct Investment (% of GDP)
Fiscal Balance (% of GDP)
Debt (% of GDP)
Primary Balance (% of GDP)a,bInternational poverty rate ($1.9 in 2011 PPP)a,b
Lower middle-income poverty rate ($3.2 in 2011 PPP)a,b
Upper middle-income poverty rate ($5.5 in 2011 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

2020
-6.2
-5.2
-2.0
-3.0
1.6
9.8
-6.6
4.2
0.0
-13.6
557.2
3.6
-0.8
1.7
109.7
1.8
42.7
66.7
84.4
-2.9
10.5

2021e
5.8
11.6
3.0
6.2
6.0
25.1
5.8
17.2
6.4
2.5
98.5
4.0
-0.4
-1.5
88.4
-1.4
40.9
65.2
83.6
2.3
10.4

2022f
3.7
3.3
4.3
4.9
3.3
2.9
3.7
-1.5
4.6
4.3
72.0
2.6
-0.7
-1.7
81.6
-1.5
40.1
64.6
83.0
1.2
10.1

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
a/ Calculations based on 2019-PICES.Actual data: 2019. Nowcast: 2020-2021. Forecasts are from 2022 to 2024.
b/ Projection using neutral distribution (2019) with pass-through = 0.87 based on GDP per capita in constant LCU.

MPO

95

Apr 22

2023f
3.6
3.4
5.5
4.8
3.2
3.4
3.6
2.5
3.6
3.9
44.0
0.3
-0.5
-2.0
78.3
-1.9
39.4
63.7
82.7
0.7
9.5

2024f
3.6
3.5
4.4
4.0
3.4
3.5
3.6
2.7
4.1
3.5
34.0
-0.7
-0.4
-1.1
76.3
-0.9
38.6
63.0
82.3
0.8
8.9

Macro Poverty Outlook

04 /2022