The reports coming from the 59th Annual Meeting of the African Development Bank Group (AfDB) currently being held in Nairobi, Kenya are encouraging. African economies remain resilient despite global challenges, as highlighted in the latest African Economic Outlook by the African Development Bank Group. The report, presented at the Bank’s Annual Meetings in Nairobi, reveals that 41 African countries are expected to experience stronger growth in 2024 compared to 2023. Africa is projected to maintain its position as the second fastest-growing region after developing Asia through 2024 and 2025.
The 2024 African Economic Outlook (AEO), themed “Driving Africa’s Transformation: The Reform of the Global Financial Architecture,” aligns with the Annual Meetings’ focus. African Development Bank President, Dr. Akinwumi Adesina, emphasised the continent’s bright future while acknowledging the need to address governance, transparency, accountability, natural capital management, and climate change. He highlighted the importance of investing in youth skills, talents, and entrepreneurship, particularly through initiatives like the Youth Entrepreneurship Investment Banks.
Despite these positive projections, the report warns that Africa is unlikely to meet most of the Sustainable Development Goals by 2030. It cautions that without corrective actions to reverse the rising poverty curve, Africa could host 87% of the world’s extreme poor by 2030.
Africa’s average growth rate is expected to rise to 3.7% in 2024 and 4.3% in 2025, surpassing the global average of 3.2%. Seventeen African economies are projected to grow by more than 5% in 2024, potentially increasing to 24 by 2025. East Africa is anticipated to lead as the fastest-growing region.
Chief Economist and Vice President of the African Development Bank, Prof. Kevin Chika Urama, stressed the importance of strategic policies and political commitment to harness resource wealth for domestic revenue. He underscored the significance of both hard infrastructure (roads, railways, bridges) and soft infrastructure (knowledge, governance capacity) in accelerating Africa’s transformation.
Regional Growth Prospects:
East Africa is expected to grow from 1.5% in 2023 to 4.9% in 2024 and 5.7% in 2025. The slight downward revision for 2024 is due to conflicts in Sudan and South Sudan. Growth in Central Africa is forecasted to moderate from 4.3% in 2023 to 4.1% in 2024, then rise to 4.7% in 2025, driven by strong growth in Chad and the Democratic Republic of Congo. Growth is predicted to pick up in West Africa, rising from 3.6% in 2023 to 4.2% in 2024 and 4.4% in 2025, with notable growth in Côte d’Ivoire, Ghana, Nigeria, and Senegal. Growth in North Africa is expected to decline from 4.1% in 2023 to 3.6% in 2024, then rise to 4.2% in 2025. Growth projections for all countries except Libya and Mauritania have been revised downward. Southern Africa is projected to grow from 1.6% in 2023 to 2.2% in 2024 and 2.7% in 2025. Upgraded growth in South Africa offsets declines in Angola, Botswana, Lesotho, Zambia, and Zimbabwe.
Reforming the Global Financial Architecture:
The 2024 African Economic Outlook calls for significant changes to the global financial system to better support African economies. It advocates for increased private sector financing to complement public investments, especially in areas with high social returns like climate action and human capital development. Simplifying climate finance to enhance coordination and access to climate finance for African countries is essential.
Multilateral Development Banks (MDBs) should provide long-term concessional financing, bolster their capital, and channel IMF’s Special Drawing Rights (SDRs) to support African development. Streamlining debt resolution mechanisms to accelerate debt workouts and ensure sustainable debt management through innovative solutions like “Brady bonds” and climate-related debt relief is critical. Enhancing domestic resource mobilisation through improved tax policies, efficient revenue collection, combating illicit financial flows, and leveraging natural resources is also vital.
The African Economic Outlook by the African Development Bank Group projects robust growth for African economies, with 41 countries expected to see higher growth in 2024 than in 2023. Africa will remain the second fastest-growing region globally. The report stresses the need to address governance, climate change, and youth investment. Despite positive growth forecasts, Africa is unlikely to meet most Sustainable Development Goals by 2030 and may host 87% of the world’s extreme poor by then. The report calls for reforms in the global financial architecture, emphasising private sector financing, streamlined climate finance, reformed MDBs, expedited debt resolution, and enhanced domestic resource mobilisation.