World Bank Slashes 2024 Growth Forecast for Sub-Saharan Africa

Samuel Mobolaji

The World Bank has revised its economic growth forecast for sub-Saharan Africa in 2024 down to 3%, a decrease from the previous estimate of 3.4%, largely due to the economic devastation caused by the ongoing civil war in Sudan.

Despite this adjustment, growth is projected to exceed last year’s 2.4% thanks to increased private consumption and investment, according to the World Bank’s latest regional economic outlook report, Africa’s Pulse. “This is still a recovery that is basically in slow gear,” stated Andrew Dabalen, chief economist for the Africa region at the World Bank, during a media briefing on Monday.

Looking ahead, the World Bank anticipates a growth rate of 3.9% in 2025, slightly above its earlier prediction of 3.8%. The report highlights that moderating inflation across several countries will enable policymakers to begin reducing elevated lending rates.

However, the report warns that these growth forecasts are vulnerable to serious risks, including armed conflicts and climate-related events such as droughts, floods, and cyclones.

The Bank noted that the conflict in Sudan has severely hampered economic activity, leading to widespread starvation and displacement. Without this turmoil, regional growth in 2024 could have been half a percentage point higher, aligning with the Bank’s initial estimates from April.

In terms of individual country performance, South Africa’s economy is projected to grow by 1.1% this year and 1.6% in 2025, recovering from last year’s 0.7%. Nigeria is expected to see a growth rate of 3.3% in 2024, increasing to 3.6% in 2025. Meanwhile, Kenya, the wealthiest economy in East Africa, is forecasted to expand by 5% this year.

Dabalen expressed concern that many economies in the region are lacking in both public and private investments, emphasizing the need for significantly higher levels of foreign direct investment (FDI) to foster a faster recovery and reduce poverty.

He pointed out that the region’s growth is being hampered by high debt servicing costs in countries like Kenya, which has experienced protests against tax hikes.

“There are staggering levels of interest payments,” Dabalen remarked, highlighting a shift in government borrowing from low-priced credit institutions like the World Bank to financial markets. Total external debt among these economies has surged to approximately $500 billion, a significant increase from $150 billion just 15 years ago. Several countries, including Chad, Zambia, Ghana, and Ethiopia, have defaulted on their debts in recent years, prompting restructuring efforts under the G20 Common Framework. While Ethiopia continues to navigate its debt restructuring, the others have completed their processes.

Dabalen warned, “As long as these debt issues are not resolved, there is going to be a lot of ‘wait and see’ games going on, which is detrimental for both the countries and their creditors.”

The World Bank has previously indicated that sub-Saharan Africa is expected to experience the fastest increase in the working-age population among all regions over the next three decades, projecting a net increase of 740 million people by 2050.

However, with about 12 million youth entering the labor market annually and only around 3 million new formal wage jobs created each year, the region faces a precarious economic future.