GDP of African Countries Projected to Grow by 3.4 % in 2024
The latest Africa’s Pulse report from the World Bank highlights that an economic rebound in Sub-Saharan Africa is being supported by increased private consumption and declining inflation. However, the recovery remains fragile due to various factors such as uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence. To sustain long-term growth and effectively reduce poverty, transformative policies are necessary to address deep-rooted inequality.
According to the report, GDP growth is projected to rebound in 2024, with an increase from 2.6 percent in 2023 to 3.4 percent in 2024, and further to 3.8 percent in 2025. However, this recovery is still uncertain. Although inflation is cooling in most economies, it remains high compared to pre-COVID-19 pandemic levels, falling from a median of 7.1 to 5.1 percent in 2024. Additionally, while the growth of public debt is slowing down, more than half of African governments are facing external liquidity problems and unsustainable debt burdens.
Overall, the report emphasizes that despite the projected growth, the pace of economic expansion in the region is still below the growth rate of the previous decade (2000-2014) and is insufficient to significantly reduce poverty. Moreover, due to factors like structural inequality, economic growth has a lesser impact on poverty reduction in Sub-Saharan Africa compared to other regions.
Andrew Dabalen, World Bank Chief Economist for Africa, stated that “Per capita GDP growth of 1 percent is associated with a reduction in the extreme poverty rate of only about 1 percent in the region, compared to 2.5 percent on average in the rest of the world.” He further emphasized that faster poverty reduction cannot be achieved through fiscal policy alone in a context of constrained government budgets. It requires policies that enhance the productive capacity of the private sector to generate more and better job opportunities for all segments of society.
The report emphasizes that African governments are facing a decrease in external resources to meet their financing needs, and the available resources are now more expensive compared to pre-pandemic times. Economic activity is being weighed down by political instability and geopolitical tensions, which may limit access to food for approximately 105 million people at risk of food insecurity due to conflict and climate shocks. To address these challenges, African governments need to take policy actions to build buffers and protect their fiscal positions from global economic disruptions.
Furthermore, Sub-Saharan Africa continues to have one of the highest levels of inequality in the world, second only to the Latin America and Caribbean region, as measured by the average Gini coefficient. Despite recent improvements, access to basic services like education and healthcare remains highly unequal. Disparities also exist in access to markets and income-generating opportunities, regardless of individuals’ skills. The impact of taxes and poorly targeted subsidies on the poor is also significant.
Gabriela Inchauste, co-author of an upcoming World Bank report on addressing inequality in Sub-Saharan Africa, states that inequality in Africa is primarily influenced by the circumstances of a person’s birth and further exacerbated by barriers to productive participation in markets and regressive fiscal policies. Identifying and addressing these structural constraints across the economy is crucial for a more prosperous future.
Africa’s Pulse recommends several policy actions to promote stronger and more equitable growth. These actions include restoring macroeconomic stability, facilitating inter-generational mobility, enhancing market access, and ensuring that fiscal policies do not disproportionately burden the poor.
