Climate crisis and unpredictable political and regulatory uncertainties are posing threats to sustained economic growth in Africa, experts said Tuesday.
Speaking during the virtual launch of the 2022 Edition of the Africa Risk-Reward Index report, the experts said the continent should confront emerging threats of sporadic conflicts, climatic shocks, and policy and regulatory uncertainties to sustain economic growth.
Patricia Rodrigues, a senior analyst for West Africa at Control Risks, a global risk consultancy firm, noted that Africa’s quest for economic revival is at stake amid pandemic-related disruptions, the Ukraine-Russia conflict and recurrent drought.
“Some of the broad threats to Africa’s economies are the climate crisis, supply chain disruptions linked to the pandemic, soaring food prices, and inconsistency in the regulatory environment,” Rodrigues said.
She added that fragile political transitions, mounting public debt and infrastructure gaps have also suppressed foreign direct investments in the continent to the detriment of economic growth.
The seventh edition of the Africa Risk-Reward Index report, compiled by Control Risks in conjunction with Oxford Economics Africa, stressed that the continent must tackle its food insecurity crisis, hasten green and just transition, and promote faith in governments among citizens to sustain growth and stability.
According to the report, Africa’s future economic growth will be hinged on the adoption of renewable energy, investments in climate-resilient food systems, speedy integration, and prudent management of public finances.
Vincent Rouget, the director for Africa at Control Risks, said the continent should leverage a stable policy and regulatory regime, innovation, and integration into global supply chains to boost economic resilience in the face of geopolitical tensions and climate emergencies.
Rouget said that harnessing opportunities presented by the African Continental Free Trade Area (AfCFTA) and boosting local manufacturing could also spur the growth of local start-ups that provide a bulk of jobs to the youth.
Zainab Animashaun, a senior analyst at Control Risks, said that African governments should leverage smart policies and regulations in a bid to tackle inflationary pressures that bode ill for the continent’s long-term growth.
In addition, the continent must balance debt servicing with investments that are pro-poor to reduce the unemployment burden which is fueling resentment against political institutions, said Animashaun.