African Development Bank Group’s Chief Economist and Vice President Prof Kevin Urama.
The African Development Bank Group revealed in its latest Macroeconomic Performance and Outlook (MEO) report that Africa is set to dominate the list of the world’s 20 fastest-growing economies in 2024, with eleven African countries making the cut.
The report, released on Friday, forecasts a real gross domestic product (GDP) growth averaging 3.8% in 2024 and 4.2% in 2025 across the continent. This projection surpasses the global average forecasts of 2.9% and 3.2% for the same period.
Africa is expected to maintain its position as the second-fastest-growing region globally, trailing only behind Asia.
From left to right: Director, Center for Sustainable Development, Columbia University, Prof Jeffrey Sachs; AU Commissioner, Ambassador Albert Muchanga; African Development Bank President Dr Akinwumi Adesina, Vice President Marie-Laure Akin-Olugbade and Chief Economist and Vice President Prof Kevin Urama.
The top-performing African countries predicted to experience robust economic growth include Niger (11.2%), Senegal (8.2%), Libya (7.9%), Rwanda (7.2%), Cote d’Ivoire (6.8%), Ethiopia (6.7%), Benin (6.4%), Djibouti (6.2%), Tanzania (6.1%), Togo (6%), and Uganda (6%).
Dr. Akinwumi Adesina, President of the African Development Bank Group, stressed the importance of increased financing and policy interventions to bolster Africa’s growth amidst global economic challenges.
The MEO report underscores the necessity for cautious optimism due to potential risks such as geopolitical tensions, regional conflicts, and political instability that could disrupt trade and investment flows across the continent.
The forecast suggests a promising medium-term growth outlook for Africa’s five regions, driven by factors like economic diversification, strategic investments, and rising public and private consumption.
Africa’s economic integration emerged as a key theme, with Commissioner Albert Muchanga highlighting its importance for competitive global market access and intra-African production of manufactured goods.
The report’s recommendations will inform African Union proposals to the G20, aiming to enhance Africa’s global economic position.
The economic outlook for East Africa is particularly optimistic, with growth projected to reach 5.1% in 2024, driven by internal connectivity improvements and intra-regional trade expansion. However, challenges persist in regions like Southern Africa, where sluggish growth is expected due to economic weakness in countries like South Africa.
Despite challenges, Africa remains resilient, with positive growth projections indicating a promising economic trajectory for the continent.
Outlook of African Economies;
East Africa: East Africa will continue to lead Africa’s growth momentum, with growth projected to rise to 5.1% in 2024 and 5.7% in 2025, supported by strong strategic investments to improve internal connectivity and deepen intra-regional trade.
North Africa: Successive adverse weather conditions and macroeconomic challenges will hold the region’s growth steady at 3.9% in 2024 with a slight improvement to 4.1% in 2025.
Central Africa: Growth is forecast to moderate to 3.5% in 2024 but projected recovery in private consumption and increases in mining investment and exports could help push growth to 4.1% in 2025.
Southern Africa: Growth will remain sluggish at 2.2 and 2.6% in 2024 and 2025, respectively. This reflects continued economic weakness in South Africa, the region’s largest economy.
West Africa: Growth is projected to pick up to 4 and 4.4% in 2024 and 2025 respectively. Strong growth in most countries in the region is projected to offset slowdowns in Nigeria and Ghana. The announced withdrawal of Burkina Faso, Mali, and Niger from the Economic Community of West African States (ECOWAS) casts a shadow over the sustainability of gains amid growing uncertainty.
Driving faster and more sustainable economic growth
The 2024 MEO says in the short term, tackling persistent inflation will need a mix of restraining monetary policy coupled with fiscal consolidation and stable exchange rates.
The report identifies structural reforms and strategic industrial policies as key to accelerating economic diversification and strengthening the export sector.
It recommends that countries invest more in human capital and pursue a resource-based industrialization and diversification strategy that allows the continent to exploit its comparative advantage and build resilience to shocks.