After hitting a low of 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 on Monday by the World Bank.
In its latest edition of the Africa’s Pulse report (April 2024), a semi-annual barometer of the state of African economies, the financial institution indicates that growth is expected to rebound in Sub-Saharan Africa, favored by an increase in private consumption and a decrease in inflation.
However, the recovery remains fragile due to uncertainties related 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 statement.
Despite the acceleration of growth forecasts, the pace of regional economic expansion remains below the growth rates recorded in the previous decade (2000-2014) and insufficient to have a significant impact on poverty reduction, notes the World Bank, emphasizing the need for transformative policy actions to address the deep inequalities that prevent Sub-Saharan Africa from benefiting from sustained long-term growth and truly reducing poverty.
Investment growth will be moderate, as interest rates are likely to remain high as long as fiscal consolidation limits the growth of public consumption, notes the Washington-based institution, adding that the contribution of the global economy to Africa's growth will remain modest.
Median inflation in the region is expected to drop from 7.1% in 2023 to 5.1% in 2024 and to 5% in 2025-2026, the source predicts, adding that the normalization of global supply chains, the steady decline in commodity prices, and the effects of monetary tightening and fiscal consolidation are contributing to the reduction of the inflation rate in the region.
Inflation is expected to decrease in about 80% of African countries compared to 2023, but it remains above pre-pandemic levels in 32 out of 37 countries, the report indicates.
The intensification of conflicts and political instability on the continent, particularly in West Africa, the Sahel, and East Africa, could undermine investor confidence and lead to an increase in inflation, which would delay the monetary policy easing cycle, the document warns.
However, the recent strength of economic activity in the United States and the decrease in inflation suggest the possibility of more robust growth thanks to improved supply conditions.
Sub-Saharan Africa has high levels of income inequality, just behind Latin America and the Caribbean, the report indicates, noting that countries with high levels of inequality tend to experience slower growth.
