‘Africa set to grow faster during 2024’

Bank Group president Dr Akinwumi Adesina makes this observation in the bank’s latest macroeconomic performance and Outlook (MEO) of the continent released late last week.

Overall, real gross domestic product (GDP) growth for the continent is expected to average 3.8 per cent and 4.2 per cent in 2024 and 2025 respectively, the report indicates, pointing out that this is higher than the projected global averages of 2.9per cent and 3.2per cent.

The continent’s growth is second-fastest region after Asia, with the top 11 African countries projected to experience strong economic performance by the forecast listed as Niger (11.2pc), Senegal (8.2pc), Libya (7.9pc), Rwanda (7.2pc), Côte d’Ivoire (6.8pc), Ethiopia (6.7pc), Benin (6.4pc), Djibouti (6.2pc), Tanzania (6.1pc), Togo (6.0pc), and Uganda at 6.0pc.

“Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than 5pc,” the report affirms, calling for larger pools of financing and several policy interventions to further boost Africa’s growth.

The report on Africa’s macroeconomic performance and outlook, a semi-annual publication released in the first and third quarters of each year, complements the African Economic Outlook (AEO), covering emerging policy issues.

The MEO report provides up-to-date evidence-based assessment of the continent’s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments, analysts assert.

The latest report urges cautious optimism given the challenges posed by global and regional risks, citing rising geopolitical tensions, increased regional conflicts and political instability. All of these could disrupt trade and investment flows, perpetuating inflationary pressures, the report warns.

Dr Adesina emphasised that fiscal deficits have improved with faster-than-expected recovery from the Covid-19 pandemic helping to shore up revenue.

“This has led to a stabilisation of the average fiscal deficit at 4.9pc in 2023, like 2022, but significantly less than the 6.9pc average fiscal deficit of 2020. The stabilisation is also due to the fiscal consolidation measures, especially in countries with elevated risks of debt distress,” he further noted, cautioning that with the global economy mired in uncertainty, the fiscal positions of the African continent will continue to be vulnerable to global shocks.

The medium-term growth outlook is slowly improving, a pointer to the continued resilience of Africa’s economies, the report asserts.

Prof. Kevin Urama, the bank’s chief economist and vice president, said in presenting the key findings of the report that growth in Africa’s top-performing economies has benefitted from a range of factors.

These include declining commodity dependence through diversification, increasing strategic investment in key growth sectors, rising public and private consumption as well as positive developments in key export markets, he said.

“Africa’s economic growth is projected to regain moderate strength as long as the global economy remains resilient, disinflation continues, investment in infrastructure projects remains buoyant, and progress is sustained on debt restructuring and fiscal consolidation,” he emphasised/

Ambassador Albert Muchanga, head of economic development, trade, tourism, industry and minerals at the African Union Commission, said that the future of Africa rests on economic integration.

“Our small economies are not competitive in the global market. A healthy internal African trade market can ensure value-added and intra-African production of manufactured goods,” he said.

The MEO forecast and recommendations will be made available to African heads of state, he said, asserting that the report will be useful when the African Union makes its proposals to the G20.

East Africa will continue to lead Africa’s growth momentum with growth projected to rise to 5.1pc on average in 2024 and 5.7pc in 2025, supported by strong strategic investments to improve internal connectivity and deepen intra-regional trade, the report specified.