AfDB unveils plan to spark Africa’s economic boom in 2024

AfDB unveils plan to spark Africa's economic boom in 2024 AfDB unveils plan to spark Africa's economic boom in 2024
The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast, September 16, 2016. REUTERS/Luc Gnago

The African Development Bank Group (AfDB) has recently unveiled its plan to ignite Africa’s economic boom in the year 2024. According to the bank’s latest Macroeconomic Performance and Outlook report, Africa is set to account for eleven out of the world’s 20 fastest-growing economies in 2024.

This promising forecast indicates that Africa’s real gross domestic product will experience significant growth, with an average of 3.8% in 2024 and 4.2% in 2025. These figures surpass the projected global averages of 2.9% and 3.2%, respectively.

The AfDB’s report highlights that Africa will continue to be the second-fastest-growing region globally, following Asia. It identifies the top 11 African countries that are projected to spearhead this transformative growth, namely Niger, Senegal, Libya, Rwanda, Ivory Coast, Ethiopia, Benin, Djibouti, Tanzania, Togo, and Uganda. These countries are expected to experience robust economic performance, with growth rates ranging from 6% to 11.2%.

Dr Akinwumi Adesina, the President of the AfDB, acknowledges the challenging economic environment both globally and regionally. However, he emphasizes that 15 African countries have already achieved output expansions of more than 5%. Adesina calls for larger pools of financing and several policy interventions to further boost Africa’s growth potential.

AfDB unveils plan to spark Africa's economic boom in 2024
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 MEO report, which provides an evidence-based assessment of Africa’s macroeconomic performance and outlook, highlights the need for cautious optimism due to the various global and regional risks that the continent faces. These risks, such as geopolitical tensions, regional conflicts, and political instability, can disrupt trade and investment flows and contribute to inflationary pressures.

Despite these challenges, President Adesina notes that fiscal deficits have improved, thanks to a faster-than-anticipated recovery from the pandemic that boosted revenue. The average fiscal deficit is expected to stabilize at 4.9% in 2023, similar to 2022 but significantly lower than the 6.9% average deficit in 2020. This stabilization is a result of fiscal consolidation measures implemented in countries with high debt distress risks.

However, President Adesina warns that the African continent’s fiscal positions remain vulnerable to global shocks amidst the uncertainty of the global economy. Nonetheless, the report shows that the medium-term growth outlook for Africa’s five regions is slowly improving, indicating the continued resilience of the continent’s economies.

Presenting the key findings of the report, the African Development Bank’s Chief Economist and Vice President, Prof. Kevin Urama, spoke about the factors contributing to the growth in Africa’s top-performing economies. These factors include a decline in dependence on commodities through economic diversification, strategic investments in key growth sectors, and increased public and private consumption. Positive developments in key export markets have also played a role in driving growth.

AfDB unveils plan to spark Africa's economic boom in 2024
The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast, September 16, 2016. REUTERS/Luc Gnago

According to Ambassador Albert Muchanga, the future of Africa depends on economic integration and the establishment of a strong internal African trade market. He explains that small economies in Africa are not competitive on a global scale, and therefore, a robust internal trade market is essential for the production of manufactured goods within the continent.

Commissioner Muchanga emphasizes the importance of sustained economic growth in Africa, highlighting factors such as continued global economic resilience, disinflation, investment in infrastructure projects, and progress in debt restructuring and fiscal consolidation. He assures that the forecast and recommendations provided by the MEO (Macroeconomic Outlook) will be shared with African heads of state and will assist the African Union in making proposals to the G20, an informal gathering of the world’s largest economies.

Meanwhile, East Africa is expected to lead Africa’s economic growth, with projections of 5.1% in 2024 and 5.7% in 2025, supported by strategic investments in improving internal connectivity and promoting intra-regional trade.

To facilitate this economic boom, the AfDB’s plan includes various measures to enhance Africa’s development. These measures involve the implementation of larger financing options and policy interventions that facilitate an enabling environment for businesses to thrive. By offering increased financial support and addressing key policy issues, the AfDB aims to accelerate economic growth and create a conducive climate for investments.

The biannual publication, Africa’s Macroeconomic Performance and Outlook, complements the existing African Economic Outlook report. While the AEO focuses on emerging policy issues relevant to the continent’s development, the MEO provides insights into the region’s economic performance and forecasts for the coming years.

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