IMF Holds Sub-Saharan Africa’s Growth Forecast at 3.6% Amid Uneven Economic Recovery

Samuel Mobolaji

The International Monetary Fund (IMF) has maintained its economic growth forecast for Sub-Saharan Africa (SSA) at 3.6 per cent for 2024, highlighting a slow and uneven recovery across the region.

Director of the IMF’s African Department, Abebe Selassie, presented the outlook at a briefing in Washington, D.C., addressing the IMF’s latest Regional Economic Outlook report titled “Reforms amid Great Expectations.”

Selassie indicated that while growth in the region is expected to increase modestly to 4.2 per cent in 2024, this rate remains insufficient to reduce poverty significantly or offset developmental setbacks.

“This pace is not enough to recover ground lost in recent years, let alone address the substantial developmental challenges ahead,” Selassie remarked, noting that current growth remains well below the six to seven per cent levels seen a decade ago.

The report outlined the region’s complex economic environment, which has been marked by some progress but also persistent vulnerabilities. To address inflation, which remains in double digits in nearly one-third of the region’s countries, including Angola, Ethiopia, and Nigeria, policymakers have tightened monetary policies, successfully bringing inflation within the target range in about half of the region.

However, challenges remain. The average debt-to-GDP ratio, while stabilised at 58 per cent due to significant fiscal consolidation, still imposes a high debt-service burden that limits resources for essential development spending. In addition, low foreign exchange reserves and competitiveness concerns further complicate the economic landscape.

According to Selassie, policymakers face three primary hurdles in their reform efforts: ensuring macroeconomic stability, addressing pressing development needs like social safety nets, and designing reforms that balance political and social considerations.

He underscored the importance of reforms that support economic diversification and provide economic opportunities, particularly for women, as vital to achieving sustainable and inclusive growth.

The IMF has stepped up engagement in the region, with over $60 billion in financing since 2020 to support SSA economies. Yet, Selassie warned that declining official development assistance challenges the efficacy of IMF support, as countries with limited market access and costly financing conditions struggle to make necessary adjustments.

While countries like Benin, Côte d’Ivoire, Kenya, Senegal, and Cameroon have recently returned to international markets, Selassie noted that many others face costly and limited access to financing.

He emphasised that reinvigorated reforms and sustainable growth strategies are essential to unlocking the region’s vast potential and reducing economic vulnerabilities.