Stears: SSA inflation will decrease to 13% in 2024

Stears, a reputed economic analysis firm, has recently released its 2024 economic outlook, projecting a decrease in inflation rates in Sub-Saharan Africa to 13 per cent this year. Additionally, a modest uptick in retail consumption is expected in 2024. The report highlights that East African economies are poised to dominate the top 10 fastest-growing economies in Africa this year. To delve deeper into the insights provided by the report, Dumebi Oluwole, Senior Economist at Stears, joined CNBC Africa for an exclusive interview. Oluwole shed light on various key points regarding the economic landscape in Africa for the year ahead. The key theme that emerged from the discussion centered around the contrasting economic trajectories of East and West African economies. Oluwole pointed out that East African nations have historically exhibited robust growth rates, maintaining a stellar performance compared to other regions on the continent. Despite a slight deceleration in growth rates compared to previous years, countries like Ethiopia, Kenya, and Rwanda are expected to sustain growth rates above five per cent in 2024. However, global monetary policy tightening and macroeconomic instability have had ripple effects, impacting growth rates in the region. East Africa, nonetheless, remains a bright spot amidst the broader economic landscape in Africa. Shifting the focus to West Africa, attention was drawn to the political landscape and its implications on socioeconomic policies. The year 2023 witnessed political turmoil in several West African nations, with military takeovers and coups raising concerns. With upcoming elections in Ghana and Senegal this year, Oluwole expressed apprehension regarding potential instability post-elections. The Senior Economist highlighted the historical trend of post-election tensions in Africa, underscoring the significance of seamless transitions for sustainable socioeconomic growth and stability. Consumer trends and inflation were central to the final segment of the interview. Oluwole elucidated on the projected decrease in inflation to around 13 per cent in Sub-Saharan Africa, accompanied by a moderate increase in retail consumption. While the overall outlook appears realistic, Oluwole emphasized the importance of examining individual countries due to their unique economic characteristics. Using Nigeria as an example, Oluwole illustrated how domestic factors like the petrol subsidy removal and exchange rate liberalization have influenced the country's inflation rates, diverging from global trends. In contrast, Kenya is poised for a slowdown in inflation following a challenging period in 2022 and 2023. Looking ahead, insights were sought on the developments expected for startups in the fintech sector across Sub-Saharan Africa. However, the discussion was cut short due to time constraints. Oluwole's analysis underscored the significance of monitoring domestic shocks, monetary policy decisions, and global economic trends to navigate the complex economic landscape in Africa. In conclusion, Stears' 2024 economic outlook provides a valuable lens into the multifaceted dynamics shaping Sub-Saharan Africa's economic trajectory. From varying growth patterns in East and West Africa to the implications of political transitions and consumer behavior, the region brims with opportunities and challenges. As stakeholders navigate the evolving landscape, prudent policymaking and strategic investments will be pivotal in fostering sustainable economic growth and stability across the continent.