World Bank: private investment in agriculture more effective for developing Africa – Ver Angola

“The short and long-term challenges include overcoming excessive debt, reducing conflict, becoming more resilient, especially in relation to climate change, and increasing productivity, and in this context agriculture is a good place to start, as is the largest employer sector on the continent,” said World Bank Chief Economist Indermit Gill, accompanied by Vice President Ayhan Kose.

At a press conference to launch the World Economic Outlook report, Indermitt Gill pointed out that “fiscal policies are key to ensuring a stable and attractive environment for the private sector”, seen as essential to ensuring the development of economies due to the lack of of governments’ financial margin.

“It has to be private investment because it is the private sector that creates jobs, complemented by very aggressive policies in health, education, and human capital,” added the economist, concluding that “this is what ensures that Africa reaps the benefits of demographic dividend and allows public spending to be channeled towards quality education and the provision of health services”.

At the press conference, World Bank economists recalled the example of several countries in Asia that have accelerated development in recent decades.

“In the context of African economies and emerging markets, the basic message is that there are no shortcuts to economic growth, it takes time and effort, but what is needed is to get started,” they considered, and in this context, agriculture is the the most comprehensive sector and, therefore, the priority.

For World Bank economists, private investment will come if governments improve macroeconomic and monetary policies, ensure stability and integrate into global value chains, through strategic partnerships that allow investors to have confidence to invest on a large scale.

In low-income countries (LICs), such as Guinea-Bissau and Mozambique, “the main priority is to bring in private investment, which was the guarantee of success for countries that are now at a higher level, middle-income”, like the other Portuguese-speaking African countries – Angola, Cape Verde, Equatorial Guinea and São Tomé and Príncipe.

For middle-income countries (MICs), the main recommendations are to reduce spending when commodity prices are high and to cut spending when international prices fall because “it worsens the volatility that economies already have and increases uncertainty that private companies already face when they have to operate in these countries” and, on the other hand, “implement policies that accelerate private investment”.

The World Bank predicts that sub-Saharan Africa’s economy will grow the most, from 3.2 percent last year to 4.1 percent this year, with Guinea-Bissau being the Portuguese-speaking country with the largest expansion, from 5 percent percent.

“Growth in sub-Saharan Africa is expected to be 4.1 percent this year and 4.3 percent in 2026, as financial conditions improve, along with a decline in inflation,” the World Bank says in its World Economic Prospects report released this Thursday.

In the document, World Bank economists say that economic growth in sub-Saharan Africa improved from 2.9 percent in 2023 to 3.2 percent last year, still 0.3 percentage points below the forecast made in June.

This worse-than-expected performance reflects “the violent conflict in Sudan and country-specific challenges that weighed on last year’s economic recovery.”

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