• Thursday, May 23, 2024
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AfDB report puts Africa’s GDP at 3.8% in 2024

AfDB report puts Africa’s GDP at 3.8% in 2024

The real Gross Domestic Product (GDP) growth for Africa is expected to average 3.8 percent and 4.2 percent in 2024 and 2025, according to the African Development Bank (AfDB).

The bank stated this in its latest Macroeconomic Performance and Outlook (MEO) report posted on its website. This is higher than the projected global averages of 2.9 percent and 3.2 percent.

According to the report, the continent is set to remain the second-fastest-growing region after Asia.

“The top 11 African countries projected to experience strong economic performance forecast are Niger (11.2 %), Senegal (8.2 %), Libya (7.9 %) and Rwanda (7.2 %).”

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“Others are Cote d’Ivoire 6.8 per cent, Ethiopia 6.7 per cent, Benin 6.4 per cent), Djibouti at 6.2 percent, Tanzania 6.1 percent, Togo at six percent, and Uganda at six percent” the report said.

It quoted Akinwumi Adesina, AfDB’s president, as saying “In spite of the challenging global and regional economic environment, 15 African countries have posted output expansions of more than five percent.”

Adesina, therefore, called for larger pools of financing and several policy interventions to boost Africa’s growth further.

Africa’s Macroeconomic Performance and Outlook is a biannual publication released in the first and third quarters of each year.

It complements the existing African Economic Outlook (AEO), which focuses on key emerging policy issues relevant to the continent’s development.

The MEO report provides an up-to-date evidence-based assessment of the continent’s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments.

Adesina said the latest report called for cautious optimism given the challenges posed by global and regional risks.

He listed the risks to include rising geo-political tensions, increased regional conflicts, and political instability all of which could disrupt trade and investment flows, and perpetuate inflationary pressures.

According to Adesina, fiscal deficits have improved, as faster-than-expected recovery from the pandemic helped shore up revenue.

“This has led to a stabilisation of the average fiscal deficit at 4.9 percent in 2023, like 2022, but significantly less than the 6.9 percent average fiscal deficit of 2020”

“The stabilisation is also due to the fiscal consolidation measures, especially in countries with elevated risks of debt distress.”

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The AfDB boss said that with the global economy mired in uncertainty, the fiscal positions of the African continent would continue to be vulnerable to global shocks.

“The report shows that the medium-term growth outlook for the continent’s five regions is slowly improving, a pointer to the continued resilience of Africa’s economies”

Presenting key findings of the report, Kevin Urama, the AfDB’s chief economist and vice president, said growth in Africa’s top-performing economies had benefitted from a range of factors.

Urama said the factors include declining commodity dependence through economic diversification, increasing stra­tegic investment in key growth sectors, rising both public and private consumption, and positive developments in key export markets.

“Africa’s economic growth is projected to regain moderate strength as long as the global economy remains resilient, disinflation continues, investment in infrastructure projects remains buoyant, and progress is sustained on debt restructuring and fiscal consolidation,” he said.

On his part, Albert Muchanga, the commissioner for economic development, trade, tourism, industry and minerals, the African Union Commission, said the future of Africa rested on economic integration.

According to Muchanga, our small economies are not competitive in the global market. Moreover, a healthy internal African trade market can ensure value-added and intra-African production of manufactured goods.

He said that the MEO forecast and recommendations would be made available to African heads of state. He said the report would be useful when the African Union made its proposals to the G20- an informal gathering of the world’s largest economies to which the Union was admitted in 2023.

“The improved growth figure for 2024 reflects concerted efforts by the continent’s policymakers to drive economic diversification strategies focused on increased investment in key growth sectors.

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“And the implementation of domestic policies aimed at consolidating fiscal positions and reversing the increase in the cost of living and boosting private consumption,’’ Muchanga said.

Mthuli Ncube, Zimbabwe’s minister of finance and economic development, described the report as being “on point” and consistent with the reality in his country.

Ncube said it was useful for economic planning across Africa and urged AfDB to continue its thoughtful leadership to help policymakers continue to build resilience to withstand shocks and drive growth.