Ghana’s economy and other countries in sub-Saharan Africa are expected to witness an encouraging 3.8 percent growth in 2024.
International Monetary Fund’s (IMF) 2024 Regional Economic Outlook for sub-Sahara Africa projected that the economies in sub-Saharan Africa will rise from the 3.4 percent recorded in 2023 to 3.8 percent in 2024.
According to the outlook, economic recovery is expected to continue beyond 2024, with growth projections reaching 4.0 percent in 2025. Additionally, inflation has almost halved, public debt ratios have broadly stabilized, and several countries have issued Eurobonds this year, ending a two-year hiatus from international markets.
Despite the positive projections, it is expected that the region will continue to be more vulnerable to global external shocks, as well as the threat of rising political instability, and frequent climate events.
To mitigate the impacts of the vulnerabilities, the IMF has urged the adoption and improvement of public finances without undermining development; monetary policy focused on ensuring price stability; and implementing structural reforms to diversify funding sources and economies.
Catherine Pattillo, Deputy Director in the IMF’s African Department speaking to Bernard Avle on the outlook on the Citi Breakfast Show on Citi FM, bemoaned the various natural disasters in southern and eastern Africa which she said may affect the projections.
“In Southern Africa, they are facing a really devastating drought and in East Africa, you are seeing a lot of flooding in a number of countries and so this impact is going to be felt and given the potential impact on the agricultural sector, it could mean that we will have to look at those growth projections again.”
On the countries expected to see a downturn in growth, she said those are not a result of borrowing as often thought but what the borrowed funds are used on.
“The issue with borrowing is not so much about whether it is a good or bad thing per se but how you use the money and whether you can generate growth and both FX and domestic revenue to make sure that you can capture the rate of return and be able to stay stable.”