Sub-Saharan African Economy Anticipates 3.7% Growth in 2024
In the face of a challenging global economic environment, a recent Reuters poll reveals that the Sub-Saharan African economy is poised to achieve an average growth rate of 3.7% next year. This optimistic outlook is driven by the prospect of lower inflation, which allows for more flexible monetary policies.
However, it’s important to note that Sub-Saharan Africa’s economic performance is intricately linked to the global economic landscape. Earlier this month, the International Monetary Fund (IMF) lowered its growth projections for both China and the euro zone. The IMF emphasized that global growth remains subdued and uneven.
The growth forecast in this survey of economists, conducted over the past week, is slightly below that of the IMF. The IMF estimates that the region’s economy will expand by 4.0% next year, following a 3.3% expansion this year.
Jane Morley, Head of Sub-Saharan Africa Country Risk at Fitch Solutions, expresses confidence in the region’s economic momentum, attributing it to decreasing inflation trends and a growing risk appetite for emerging markets. She aligns her expectations with the poll’s median figure of 3.7% growth for 2024.
Morley also anticipates marginal improvements in the economic performance of key countries like South Africa and Nigeria, which together contribute significantly to the region’s nominal GDP. The expected monetary easing across most major markets is likely to support consumer and business activities in the latter part of the coming year.
Nigeria, Sub-Saharan Africa’s largest economy, is expected to achieve a growth rate of 3.0% both this year and next. However, in the second quarter of this year, its growth rate dipped to 2.51% due to a decrease in oil production as a result of ongoing reforms.
In an earlier Reuters poll this month, South Africa’s economy was projected to grow by 1.2% in 2024, driven by improvements in energy supplies. Another poll from September suggested that the impact of rate cuts, as inflation gradually subsides, will become more noticeable in a couple of key economies by the latter part of next year.
Ghana’s GDP growth is predicted to accelerate to 3.4% in 2024 from 2.9% this year, although it remains significantly lower than the impressive 5.1% growth rate achieved in 2021. Kenya, on the other hand, is set to experience a robust economic growth of 5.2% in the coming year.
Zambia’s economy is expected to expand by 3.9% this year and 4.0% in 2024, aligning closely with the IMF’s estimates of 3.6% and 4.3%, respectively. Zambia became the first African nation to default during the pandemic, and its debt restructuring process has faced significant delays despite reaching broad terms with official creditors to restructure $6.3 billion of debt in June.
Jacques Nel, Head of Africa Macro Research at Oxford Economics Africa, remains cautious about the fiscal outlook for 2024. He emphasizes that government finances are unlikely to see significant improvements, the cost of living remains high, and global economic growth is expected to slow down further.
Nel concludes, “Aggressive policy reforms, if taken in a positive direction, will be the most effective route for most African countries to realize a brighter 2024.”
