African countries are predicted to dominate the world’s top 10 highest growing economies in 2024, a report on Recent Economic and Social Developments in Africa by the Economic Commission for Africa (ECA) has said.
The report said the most notable growth drivers in Africa in 2024 would be Niger, Senegal, Ivory Coast, DRC and Rwanda.
Adam Elhiraika, the Director of Macroeconomics and Governance Division at ECA, said Africa was the fastest growing region after East and South Asia in the developing world in 2023, and it would continue this trend in 2024 and 2025.
The report shared with the Ghana News Agency showed that Niger and Senegal were expected to experience significant economic growth due to the increase in hydrocarbon production and exports.
It said growth in Niger would also be fueled by the revival of agriculture and a rise in crude oil production, which would have beneficial impact on the transportation sector.
However, recent military coups together with sanctions from regional blocs, had disrupted economic activities leading to significant social costs.
The report said the growth in Senegal would be driven by rising private and infrastructure projects.
However, in the electioneering year where residents in up to 15 African nations would be participating in elections, including the recently concluded presidential elections in Senegal, the country’s short-term growth and development could be adversely impacted.
“In Ivory Coast, DRC and Rwanda, the robust expansion in these nations is attributed to an increase in infrastructure investment, continuous development in tourism, good performance of the mining industry, and advantages of economic diversification,” Mr Elhiraika said.
Growth in the DRC, it said, would be fueled by the extractive sector due to the opening of new oilfields, agriculture, services, and mining, in accordance with the national strategy to boost social and investment expenditures.
Rwanda’s growth would be fueled by private consumption and investment, while Ivory Coast’s growth was driven by increased investment stemming from pro-competitive market reforms and business environment improvements in the National Development Plan, alongside private consumption influenced by decreasing inflation, it said.
The report further showed that the continent was expected to grow from 2.8 per cent in 2023 to 3.5 per cent in 2024 and reaching a percentage of 4.1 in 2025, which was mainly underpinned by net exports, private consumption and gross fixed investment.
It said presently, Africa’s economic growth remained unstable and lower than potential, and the rate required for achieving the Sustainable Development Goals (SDGs) and Agenda 2063 target, necessitating that major fiscal and monetary policy shifts as well as increased efforts must introduced to address internal and external balances, inflation and debt issues.
In 2023, the report said, the global economy showed resilience with declining energy and food prices, increased consumption in China, and improved US economic growth.
Still, the outlook remained uncertain, with high debt, rising borrowing costs, weak global trade, and mounting geopolitical risks, constraining progress towards the SDGs and Agenda 2063 targets.
Mr Elhiraika said the region faced threats of tighter monetary and fiscal conditions and notable debt sustainability risks, adding that the ongoing climate catastrophes and extreme weather occurrences would continue to negatively impact agriculture and tourism, while geopolitical instability would likewise affect certain sub-regions in Africa.
Again, trade in Africa continued to face headwinds reflected in net capital outflows and subdued export revenues, with intra-African trade remaining relatively low.
Africa’s total exports were largely concentrated on extractive commodities, which had kept the region trapped at low points along critical value chains, the report showed.
Social development trends in Africa were concerning, with rising poverty, inequality and unemployment exacerbating the continent’s challenges to achieve the SDGs.
The ECA report noted that the capacity of African countries to effectively tackle poverty and inequality was severely constrained by the low poverty-reducing effect of economic growth.
Some key recommendations in the report included a call to revitalise trade in Africa to reduce trade costs in Africa.
The implementation of the African Continental Free Trade Area (AfCFTA) was vital to boost trade, eliminate barriers, and promote other trade liberating strategies.
It said to achieve the Sustainable Development Goals (SDGs), it is necessary to mobilise more domestic resources and introduce innovative finance mechanisms through capacity building, institutional strengthening, and promotion of (tax) reforms; use digital technology; introduce environmental taxation; implement innovative finance mechanisms, such as debt swaps.
Again, with the increasing number of countries in or at risk of debt distress, sustainable debt relief and restructuring measures are required.
Countries should implement structural reforms to help revive growth and bolster resilience and to enhance the effectiveness of fiscal and monetary policies to contain inflation.
It further recommended that African countries capitalised on the current global shifts, including the transition towards renewable energy and the revitalised significance of critical minerals.
GNA