Nigeria missing among 11 African countries to lead 2024 global growth – AfBD

Nigeria is missing from the list of 11 African countries that will account for eleven of the world’s 20 fastest-growing economies in 2024, according to the African Development Bank Group’s latest Macroeconomic Performance and Outlook of the continent.

Africa is positioned to uphold its status as the second-quickest-growing region, following Asia.

“Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than 5 percent,” Akinwumi Adesina, Bank Group President, said.

The top 11 African countries projected to experience strong economic performance forecast are Niger (11.2 percent), Senegal (8.2 percent), Libya (7.9 percent), Rwanda (7.2 percent), Cote d’Ivoire (6.8 percent), Ethiopia (6.7 percent), Benin (6.4 percent), Djibouti (6.2%), Tanzania (6.1 percent), Togo (6 percent), and Uganda at 6 percent.

The continent’s real gross domestic product (GDP) growth is forecasted to average 3.8 percent in 2024 and 4.2 percent in 2025, surpassing the projected global averages of 2.9 percent and 3.2 percent, respectively.

Nigeria has taken a downturn, as it economy grapples with high inflation, poverty, and increased unemployment, heightened by the removal of petrol subsidies and the devaluation of the naira.

Nigeria’s annual inflation rate reached 29.90 percent in January, the country’s statistics agency reported as the naira continues to weaken.

The Consumer Price Index report released by the NBS showed that prices rose by 0.98 percent to 29.90 percent in January 2024, compared with 28.92 percent in December.

In the last 10 months, at least five multinationals have wound down operations in Africa’s largest economy, the latest being Procter & Gamble, an Ohio-based consumer goods giant, which announced that it will dissolve all on-ground operations.

The bank’s projections indicate East Africa leading in economic growth at 5.1 percent in 2024, followed by West Africa at 4.0 percent.

Conversely, North and Central Africa is anticipated to grow at 3.9 percent and 3.5 percent, respectively, while Southern Africa is expected to experience the weakest growth at 2.2 percent in 2024.

Adesina added that 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,” Adesina said.

However, he cautioned that Africa’s fiscal positions remain susceptible to global shocks amidst the current uncertain global economic landscape.

“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,” Adesina said.

The report advises cautious optimism due to challenges posed by global and regional risks such as rising geopolitical tensions, escalating regional conflicts, and political instability, which could disrupt trade and investment flows and perpetuate inflationary pressures.

Albert Muchanga commissioner for Economic Development, Trade, Tourism, Industry and Minerals, African Union Commission, ambassador said the future of Africa rests on economic integration.

“Our small economies are not competitive in the global market. A healthy internal African trade market can ensure value-added and intra-African production of manufactured goods,” Muchanga said.

Jeffrey Sachs, director of the Center for Sustainable Development, Columbia University also noted that long-term affordable financing must be part of Africa’s strategy to achieve growth of 7 percent or more per year and warned that Africa is paying a very high-risk premium for debt financing. He called for this point to be made to the G20.

“Long-term development cannot be based on short-term loans. Loans to Africa should be at least 25 years or longer. Short-term borrowing is dangerous for long-term development. Africa must act as one, in scale,” Sachs said.