The global economy currently stands at a crucial crossroads, encountering several unprecedented challenges that have suppressed growth. To reignite growth, a unique blend of specific policies, strong international collaboration, and a fresh perspective on the global economy are needed, with a special emphasis on Africa. Africa, with its growing, youthful population, rich natural resources, and strategic position for global trade, should be a key focus in rejuvenating the global economy.
Africa's potential for sustained, inclusive, and environmentally conscious growth over the next decade could lift millions from poverty and catalyze a worldwide recovery. This, however, hinges on significant investments in Africa's underdeveloped physical and social infrastructure. Africa's ability to harness its economic prospects and become a global growth engine relies on improved infrastructure, efficient institutions, and its youthful workforce.
The global economy is enduring a prolonged slowdown. As per a 2023 World Bank report, the drivers of growth and prosperity since the early 1990s are weakening. Even before trade routes crisis-19, factors like an aging population and declining productivity were already decelerating growth. The compounded impact of the crisis, and high inflation, coupled with rapid interest rate increases, along with preexisting structural issues, presents substantial obstacles to global economic growth.
The World Bank projects that the global potential GDP growth rate could drop to its lowest in three decades, around 2.2% annually, until 2030. This decline is evident in the gradual decrease over the past two decades. The average real GDP growth rate has fallen from 3.7% in 2000 to 2.4% in 2021, and the GDP per capita growth rate has fallen from 2.2% in 2000 to 1.4% in 2021. Without significant policy interventions, the world risks a 'lost decade' of stagnation.
The current global economic downturn is influenced by several factors, many of which can be mitigated through specific and collaborative policy measures.
These factors include:
The aging workforce and consumer bases, prevalent in developed countries but also in emerging markets and developing economies (EMDEs);
A decrease in worldwide productivity;
The substantial debt that has been accruing over the last decade;
The long-term increase in energy and food costs;
A rise in geopolitical divisions, trade protectionism, and a reduction in international trade levels; and
An increase in the frequency and intensity of natural disasters, leading to broader security challenges.
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