Sub-Saharan Africa: Growth expected to rebound to 3.4% in 2024


After reaching its lowest point at 2.6% in 2023, economic growth in sub-Saharan Africa is expected to rebound to 3.4% this year and 3.8% in 2025, according to data released Monday by the World Bank.

In its latest edition of the Africa’s Pulse report (April 2024), a biannual barometer of the state of African economies, the financial institution indicates that growth should rebound in sub-Saharan Africa, thanks to the increase in private consumption and the decline of inflation.

The recovery, however, remains fragile due to uncertainties linked to the global economic situation, the increasingly heavy burden of debt service, frequent natural disasters and an intensification of conflicts and violence, notes the same source in a communicated.

Despite forecasts of accelerated growth, the pace of regional economic expansion remains lower than the growth rates recorded in the previous decade (2000-2014) and insufficient to have a significant effect on poverty reduction, notes the World Bank, which highlights the need for transformative policy actions to address the deep inequalities that prevent sub-Saharan Africa from enjoying sustained long-term growth and meaningful poverty reduction.

Investment growth will be moderate, as interest rates are likely to remain high as long as fiscal consolidation limits public consumption growth, notes the Washington-based institution, adding that the economy’s contribution global growth in Africa will remain modest.

Median inflation in the region is expected to fall from 7.1% in 2023 to 5.1% in 2024 and 5% in 2025-2026, the same source predicts, adding that the normalization of global supply chains, the decline constant commodity prices and the effects of monetary tightening and fiscal consolidation are helping to bring down the inflation rate in the region.

Inflation is expected to decline in about 80% of African countries compared to 2023, but remains above pre-pandemic levels in 32 out of 37 countries, the report said.

Intensifying conflicts and political instability on the continent, particularly in West Africa, the Sahel and East Africa, could deteriorate investor confidence and lead to higher inflation, which which would delay the cycle of monetary policy easing, the document warns.

However, recent strength in economic activity in the United States and falling inflation suggest the possibility of more robust growth thanks to improving supply conditions.

Sub-Saharan Africa has high levels of income inequality, second only to Latin America and the Caribbean, the report said, noting that countries that suffer from high levels of inequality tend to experience slower growth.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button