The IMF projects 3.8% economic growth in Sub-Saharan Africa by 2024

Apr 22, 2024 | International | 0 comments

The International Monetary Fund (IMF) projects economic growth in Sub-Saharan Africa (SSA) to rise from 3.4 percent in 2023 to 3.8 percent in 2024, according to Abebe Selassie, Director of the African Department at IMF. Selassie made this announcement during a news briefing on the IMF’s Regional Economic Outlook for SSA titled “A Tepid and Pricey Recovery” in Washington, DC.

Selassie stated that economic recovery was expected to continue beyond 2024, with growth projections reaching 4.0 percent in 2025. He highlighted that after four challenging years and multiple shocks, SSA’s economy appears to be on the mend. Growth is expected to accelerate to 3.8 percent from 3.4 percent last year after peaking at almost 10 percent in late 2022.

Selassie mentioned that inflation had halved in the early months of this year due to decisive actions by central banks, including slower food price increases. He noted that fiscal consolidation efforts were starting to pay off, with the median public debt stabilizing at around 60 percent of Gross Domestic Product (GDP), halting a 10-year upward trend.

Selassie added that with global financial conditions easing, a few countries have been able to return to international markets, ending a two-year hiatus. However, he cautioned that though the signs were encouraging, the region was not out of the woods. Many countries still faced a funding squeeze, with high borrowing costs and curtailed funding sources.

He stressed that sustaining reforms would be crucial for macroeconomic conditions to continue to improve. Selassie outlined three policy priorities to help countries in the region adapt to the challenges. The first priority is to continue improving public finances, with an emphasis on domestic revenue mobilization. The second is to sustain the focus on reducing inflation wherever inflation remains well above the target. The third priority is to implement reforms that enhance skills development, spur innovation, improve the business environment, and promote trade integration to secure more affordable and stable financing.

Selassie emphasized that support from the international community would remain essential, stating that the IMF stands ready to help, having already provided $58 billion in financing to the region since the start of the pandemic. He concluded by stressing that the region is at a turning point and expressing confidence that with the right policy choices, the region will ensure that this will be the African century.

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