April 8, (THEWILL) – The World Bank has projected that growth in Africa’s economies will rebound in 2024, rising from a low of 2.6 per cent in 2023 to 3.4 per cent in 2024, and 3.8 per cent in 2025.
In its Africa’s Pulse report released on Monday, the bank cited increased private consumption and declining inflation as supporting variables for the economic rebound.
The report, however, said the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence.
“However, this recovery remains tenuous. While inflation is cooling across most economies, falling from a median of 7.1 to 5.1 percent in 2024, it remains high compared to pre-COVID-19 pandemic levels.
“Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems and face unsustainable debt burdens.
“Transformative policies are needed to address deep-rooted inequality to sustain long-term growth and effectively reduce poverty,” it added.
According to Andrew Dabalen, World Bank Chief Economist for Africa, “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.
“In a context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone. It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society.”
It highlights that external resources to meet the gross financing needs of African governments are shrinking and those available are costlier than they were prior to the pandemic.
Overall, the report underscores that despite the projected boost in growth, the pace of economic expansion in the region remains below the growth rate of the previous decade (2000-2014) and is insufficient to have a significant effect on poverty reduction.
“Inequality in Africa is largely due to the circumstances in which a child is born and accentuated later in life by obstacles to participating productively in markets and regressive fiscal policies.
“Identifying and better addressing these structural constraints across the economy offers a road map for a more prosperous future,” said Gabriela Inchauste, co-author of a forthcoming World Bank report on tackling inequality in Sub-Saharan Africa.
The report calls for several policy actions to foster stronger and more equitable growth. These include restoring macroeconomic stability, promoting intergenerational mobility, supporting market access, and ensuring that fiscal policies do not overburden the poor.
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