Africa's Economy Projected to Grow Modestly

Addis Ababa January 25/2024 (ENA) Economic growth in Africa is projected to remain modest in 2024 amidst the high borrowing costs, geopolitical instability and climate change impacts. 

According to UN "World Economic Situation and Prospects 2024", persistently high interest rates, further escalation of conflicts, sluggish international trade and increasing climate disasters pose significant challenges to global growth.

Global economic growth is projected to slow from an estimated 2.7 percent in 2023 to 2.4 percent in 2024, trending below the pre-pandemic growth rate of 3 percent, the report stated.

Accordingly, the economic growth in Africa is projected to remain modest, buffeted by the global economic slowdown, tighter monetary and fiscal conditions, and a worsening debt sustainability situation reaching 3.5 percent in 2024, a slight improvement from 3.3 percent in 2023.

Many African economies faced significant inflationary pressures in 2023, largely because of high fuel and food prices.

Following the launching of 2024 World Economic Situation and Prospects Report at the ECA today, UNECA Macroeconomics and Governance Division Director Adam Elhiraika said that the global economy grew at 2.7 percent in 2023, but the growth is expected to slowdown in 2024.

Africa’s growth is reported lower than expected in 2023 as the continent grew at 3.3 percent and this growth rate is expected to pick up slightly, he added.

The rising food price, inflation, and the slowdown of global demand, among others, are the reasons for the slowdown of the economic growth, it was pointed out.

For Africa in particular, the advice is to focus more on domestic drivers of growth, especially governments need expansionary fiscal and monetary policies, even at a time when the continent has to deal with inflation and instability.

“We have to look at sources of growth and how to enhance growth through increasing domestic expenditure on infrastructure and to attract more domestic and foreign investments.”

Despite challenges, the continent’s economy is forecast to grow by 4.2 percent in 2025.