Charting Africa’s Economic Course in 2024

By James Woods* [caption id="attachment_110916" align="alignnone" width="1373"] Africa's economic outlook for 2024 is one fuelled with optimism and complexities. Photo courtesy[/caption] Africa's economic outlook for 2024 is one fuelled with optimism and complexities, with the continent positioned as a key player in the global economic landscape yet grappling with its own unique set of challenges ranging from governance, health, trade, high debt, conflict to name a few. Africa's economic optimism in 2024 is underpinned by several factors. Notably, the continent is experiencing a demographic dividend, with a youthful population that can be a tremendous asset if properly harnessed through education and job creation. Moreover, Africa is increasingly urbanising, creating opportunities for industrialisation and consumer growth. However, these promising developments coexist with a range of challenges. Governance issues persist in various regions, hindering effective resource allocation and infrastructure development. Health concerns, exemplified by the ongoing battle against diseases such as malaria and the need for accessible healthcare, remain on the agenda. Conflicts and coups have been on the rise since 2020 causing instability. Trade barriers and tariff disputes can slow down the continent's integration into the global economy, making it crucial to address these issues collectively. According to a World Bank report, Sub-Saharan Africa is expected to be a bright spot in the global economy with a forecasted growth rate of 3.8% in 2024 and rising to 4.1% in 2025. This is significant considering the global economic context, where the World Bank also reports that the global economy is set for its weakest half-decade performance in 30 years. The overall global growth is projected to slow from 2.6% in the last year to 2.4% in 2024. This global slowdown juxtaposed with Africa's growth trajectory highlights the continent's resilience and potential in a challenging global economic environment. [caption id="attachment_110917" align="alignnone" width="882"] Africa’s youthful population can be a tremendous asset if properly harnessed through education and job creation. Photo courtesy[/caption] Sub-Saharan Africa's growth prospects in 2024 are encouraging, driven by various factors: Investments in infrastructure, including roads and energy projects, are helping to reduce transportation costs and spur economic activity. Additionally, increasing regional cooperation and trade agreements are creating new opportunities for businesses and boosting intra-African trade. However, it's important to note that these growth rates are not uniform across all African nations. While some countries are experiencing growth and expansion, others are facing economic challenges. The diversity in growth performance highlights the complexity of the African continent and the need for tailored strategies to address each nation's unique circumstances not a one fit all system implementation. The Economist Intelligence Unit (EIU) predicts that Africa will be the world's second-fastest-growing major region in 2024, with East African states leading the charge. However, not all African countries are expected to enjoy this upward trend, as some, like Sudan and Equatorial Guinea, are projected to see their economies contract. Whilst Niger, Senegal, Rwanda, Libya, and Ivory Coast are forecasted to be among the fastest-growing economies. Niger, for example, is projected to have a staggering 11.1% GDP growth, driven by factors such as oil production and agricultural sector strength. The factors behind these diverse growth trajectories are many. The construction industry, transportation, tourism, mining, and tech sectors are expected to play a significant role in driving the growth of the African economy. The continent’s growth is also getting a boost from strategic economic diversification and efforts to attract foreign direct investments. For instance, countries like Kenya and Ethiopia are investing heavily in infrastructure, including the construction of new railways and highways, which is expected to facilitate trade and stimulate economic growth. African nations are increasingly recognising the importance of economic diversification to reduce reliance on a single sector, such as commodities. Investments in technology and innovation are driving productivity gains and fostering entrepreneurship. Furthermore, initiatives to improve the ease of doing business and enhance the investment climate are attracting foreign investors seeking opportunities in Africa's emerging markets. However, the continent faces challenges, including dealing with the aftermath of the pandemic, which has strained public finances and led to heavy debt obligations in some countries. This economic strain has already triggered defaults in nations like Ethiopia, Zambia, and Ghana. Moody’s Investors Service has expressed a negative outlook on African economies' credits due to high debt-financing risks and the impact of China’s growth slowdown on demand for Africa’s commodity exports. African governments are actively seeking solutions, such as debt restructuring and seeking partnerships for economic recovery. The economic impact of the COVID-19 pandemic has been substantial, with many African countries grappling with reduced revenues, increased healthcare costs, and disrupted supply chains. The pandemic has underscored the importance of building resilient healthcare systems and diversifying revenue sources. International cooperation and assistance have played a critical role in supporting African nations' efforts to combat the virus and mitigate its economic fallout. In the political sphere, 2024 is a significant year for Africa, with numerous countries such as Namibia, Mozambique, Senegal and powerhouses like Algeria, Ghana, and South Africa, set to hold elections. These political events are expected to increase the level of political risk in the region, potentially affecting economic stability and policy consistency. The outcomes of these elections will be closely monitored by investors and international observers for their impact on the investment climate in these nations. Elections in African countries have historically been pivotal moments that can shape the trajectory of governance, policy, and economic development. A peaceful and transparent electoral process is crucial for maintaining investor confidence and ensuring continuity in policy direction. However, the electoral landscape in Africa can be complex, with varying levels of political stability and electoral transparency across countries. Ensuring free and fair elections is a priority for many African nations to strengthen their democratic institutions and create an environment conducive to sustainable economic growth. [caption id="attachment_110717" align="alignnone" width="2048"] Outgoing Liberian President George Weah with his successor Joseph Boakai. Africans are hoping to see more of peaceful transitions and less political chaos in the 2024 elections cycle[/caption] In essence, Africa's path to becoming a dynamic economic powerhouse is marked by both its unique economic dynamism and complicated socio-political environments. The continent’s journey is one of managing growth in the face of diverse challenges while harnessing its untapped potential. The years ahead for Africa are pivotal, demanding strategic planning and innovative solutions to maximize opportunities and navigate the complexities of its economic and political landscape. Africa's ability to address its challenges and leverage its strengths will determine its role in the global economy and the well-being of its people. Amidst the myriad of issues facing Africa's economic outlook for 2024, there are also stories of resilience and progress. Cape Verde's achievement in becoming malaria-free after 50 years is not just a health milestone but showcases what collective commitment, drive and determination can achieve. While Africa grapples with various economic and socio-political issues, this success story from Cape Verde serves as a reminder that progress is possible through focused efforts and strengthening systems. The continent has the potential not only to overcome its challenges but also to lead the way in addressing pressing global issues, illustrating that Africa is not only a continent of challenges but also a continent of solutions and achievements. *James Woods, is a versatile professional with expertise in sports management, business, politics, and strategic communications. As an entrepreneur and former senior diplomat, he has represented Malawi in various European nations, including Belgium, Andorra, France, Monaco, the Netherlands, Italy, Luxembourg, and the European Union institution. Currently pursuing an MBA at the University of Oxford, he is affiliated with Kellogg College. James is also an Archbishop Desmond Tutu Fellow and was awarded the prestigious African Achiever of 2015. *Culled from January Issue of PAV Magazine