CEM REPORT, ECONOMY | The African continent is gearing up for a significant economic leap in 2024, according to the latest Macroeconomic Performance and Outlook (MEO) report released by the African Development Bank (AfDB) Group. The report forecasts that Africa will host eleven of the world’s 20 fastest-growing economies this year, marking a notable milestone in the region’s economic trajectory.
Africa Growth Projections
With an expected average real gross domestic product (GDP) growth of 3.8% in 2024 and 4.2% in 2025, Africa is poised to outpace the global averages of 2.9% and 3.2% for the same periods, respectively. This growth momentum solidifies Africa’s position as the second-fastest-growing region after Asia. Countries such as Niger, Senegal, and Rwanda are projected to lead the economic charge with growth rates exceeding 7%.
11 African Powerhouses to Watch:
Niger: Leading the pack with an expected 11.2% GDP growth in 2024, Niger’s economic boom is fueled by rising uranium prices and infrastructure investments.
Senegal: Boasting an 8.2% growth forecast, Senegal’s diverse economy, anchored by tourism and agriculture, is expected to continue its upward trajectory.
Libya: With a projected 7.9% growth, Libya’s post-conflict reconstruction and oil production rebound are driving its economic recovery.
Rwanda: Rwanda’s commitment to digitalization and green growth is paying off, with a 7.2% growth forecast fueled by innovation and sustainable practices.
Cote d’Ivoire: Côte d’Ivoire’s strong cocoa and cashewnut exports, coupled with infrastructure projects, are expected to propel its 6.8% growth.
Ethiopia: Despite facing challenges, Ethiopia’s large population and ongoing reforms are projected to deliver 6.7% growth.
Beyond the Top 5:
Benin: With a 6.4% growth forecast, Benin’s cotton production and regional trade are fueling its economic expansion.
Djibouti: Strategic location and infrastructure investments are driving Djibouti’s 6.2% growth trajectory.
Tanzania: Tanzania’s diversified economy, including tourism and mining, is expected to grow 6.1% in 2024.
Togo: Togo’s focus on infrastructure development and port modernization is expected to contribute to its 6% growth.
Uganda: Uganda’s oil production and infrastructure investments are driving its 6% growth forecast.
Challenges and Opportunities
Despite the promising outlook, the report underscores the challenges posed by global and regional risks. Rising geopolitical tensions, regional conflicts, and political instability are identified as potential disruptors to trade and investment flows, which could exacerbate inflationary pressures. Dr. Akinwumi Adesina, President of the AfDB Group, emphasized the need for larger pools of financing and strategic policy interventions to sustain Africa’s growth trajectory amidst these challenges.
Fiscal Resilience Amid Uncertainty
Adesina highlighted the improvement in fiscal deficits, attributing it to a faster-than-expected recovery from the pandemic and fiscal consolidation measures. However, he cautioned that Africa’s fiscal positions remain vulnerable to global shocks amid the prevailing uncertainty in the global economy. The report calls for cautious optimism while advocating for continued fiscal prudence and proactive risk management strategies.
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“This has led to a stabilisation of the average fiscal deficit at 4.9 per cent in 2023, like 2022, but significantly less than the 6.9 per cent 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 added.
Resilience and Diversification
The report also points to the resilience of Africa’s economies, citing factors such as economic diversification, strategic investments in key growth sectors, and rising public and private consumption. Prof. Kevin Urama, Chief Economist and Vice President of the AfDB, noted that these factors have contributed to the growth of Africa’s top-performing economies, reducing dependency on commodities and fostering sustainable economic development.
“Growth in Africa’s top-performing economies has benefitted from a range of factors, including declining commodity dependence through economic diversification, increasing stra¬tegic investment in key growth sectors and rising both public and private consumption, as well as positive developments in key export markets.”
Looking Ahead
Africa’s economic rise is a story of resilience and innovation. The 11 countries highlighted in this report offer exciting investment opportunities and showcase the continent’s diverse growth potential. However, navigating global challenges and implementing sound economic policies will be crucial to sustaining this momentum and ensuring inclusive prosperity for all Africans.
By providing insights into Africa’s economic outlook, the MEO report lays the groundwork for informed decision-making and sustainable development initiatives across the continent. As Africa continues on its growth trajectory, collaboration between governments, international organizations, and the private sector will be instrumental in unlocking the continent’s vast potential and fostering inclusive prosperity for all.
