The International Monetary Fund (IMF) has forecasted that six Sub-Saharan African economies will emerge among the top 10 global performers in 2024.
This optimistic projection was revealed as part of the IMF’s economic outlook for the region.
The smaller-sized economies are expected to contribute significantly to the overall growth trajectory, compensating for the subdued performances of heavyweight nations like South Africa and Nigeria, which jointly account for two-fifths of Africa’s $2 trillion economy.
While the larger economies face hurdles, the collective vigor of the smaller nations is anticipated to make a positive impact in a region grappling with persistent poverty and inequality.
Bloomberg Africa Economist Yvonne Mhango emphasized the brightening growth prospects, stating, “Eight of the region’s top-10 biggest economies – which together account for another 40% of regional GDP – will grow by a strong 5% on average.”
Among these top performers, Ivory Coast and Tanzania stand out with growth rates forecasted at 6.6% and 6.1%, respectively. Both countries have successfully diversified their economies and attracted foreign investment.
The IMF’s projections suggest a moderate improvement in regional growth to 4% in 2024 from 3.3% in 2023.
While South Africa and Nigeria may not witness a rapid surge in the near term, ongoing reforms in both nations are expected to yield positive outcomes over time.
Nigerian President Bola Tinubu’s bold measures to relax the foreign-exchange regime and remove fuel subsidies indicate a commitment to reform, while South Africa is making strides in addressing its energy crisis.
Despite the positive outlook, analysts remain cautious due to the challenges faced by the region during the pandemic, including strained public finances and heavy debt burdens.
Some nations, including Ghana, Zambia, and Ethiopia, have already experienced defaults, and access to foreign capital markets remains a challenge.
Moody’s Investors Service highlights elevated debt-refinancing risks, with African sovereigns facing a negative credit outlook.
The IMF’s forecast underscores the importance of ongoing reforms in South Africa and Nigeria, positioning them for growth in the coming years.