THE IMF has issued a sobering assessment of sub-Saharan Africa’s economic performance, highlighting a widening income gap compared to the rest of the world amidst a tepid recovery. The IMF’s biannual Regional Economic Outlook report, unveiled during its Spring Meetings in Washington, underscores the region’s ongoing challenges and vulnerabilities.
‘While accounting for population growth, the income gap with the rest of the world is widening,’ stated the IMF in its report, reflecting on the region’s economic trajectory.
Despite a projected growth rate of 3.8 percent for 2024—an improvement from 3.4 percent in 2023—sub-Saharan Africa faces significant headwinds, including the lingering effects of the Covid-19 pandemic, geopolitical tensions, and rising global interest rates fuelled by events like Russia’s invasion of Ukraine.
Abebe Selassie, Director of the IMF’s African Department, acknowledged some positive signs of growth: ‘Two-thirds of the countries are already experiencing acceleration in growth; diversified and fairly broad-based growth.’
However, challenges persist. Political instability is on the rise, eroding investor confidence in countries like Burkina Faso, Mali, and Niger—recently departing from the Economic Community of West African States (ECOWAS)—amid a string of upcoming elections across the region.
Environmental factors also compound the region’s struggles, with devastating droughts in the Horn of Africa and ongoing challenges in southern Africa due to cyclones and floods.
Economic conditions vary across the region. South Africa, the most industrialised economy, is expected to grow by just 0.9 percent in 2024, facing infrastructure challenges and electoral uncertainties. Nigeria, West Africa’s largest economy, anticipates 3.3 percent growth amidst high inflation and currency reforms. In contrast, Niger is poised for a remarkable growth surge of 10.4 percent driven by expanding oil exports.
Despite pockets of growth, sub-Saharan Africa remains at a critical juncture, navigating complex economic, political, and environmental landscapes. The IMF’s warnings emphasise the need for sustained reforms, resilience-building measures, and international support to foster inclusive and sustainable development across the region.