AfDB releases 2024 Africa macroeconomic performance & outlook report

The African Development Bank has released its economic performance outlook for 2024, projecting a moderate strength in economic growth across Africa if the global economy remains resilient and disinflation continues. The report highlights the continent's resilience amidst various risks and challenges, including climate change, geopolitical tensions, and fiscal consolidation in major economies. East Africa has emerged as the fastest-growing region on the continent, showcasing potential amidst the prevailing uncertainties. Professor Kevin Urama, the Chief Economist of the African Development Bank, emphasized the impact of external factors on African economies, such as supply chain disruptions due to global conflicts. He pointed out that traditional tools like interest rates may not effectively address inflation caused by structural challenges and supply shocks. Despite these obstacles, over 11 African countries are projected to be among the 20 fastest-growing economies globally by the end of 2024. However, Urama cautioned that while GDP growth rates are impressive, sustainable development must also focus on increasing GDP per capita to alleviate poverty. The report underscores the importance of structural transformation to ensure that economic growth translates into tangible benefits for African populations. In order to achieve this, African governments must prioritize fiscal policies, enhance revenue mobilization strategies, and invest in key sectors such as agriculture, infrastructure, and human capital. Urama highlighted the significance of increasing domestic revenue through tax reforms and leveraging Africa's abundant natural resources for sustainable development. Addressing infrastructure gaps and investing in human capital are essential for promoting inclusive growth and fostering sustainable development in Africa. The report calls for concerted efforts to fast-track structural transformations and unlock the continent's economic potential. While progress has been made in macroeconomic policy management, there is a need for greater focus on fiscal stability, revenue generation, and strategic investments to drive long-term growth and prosperity. African leaders must seize the opportunity to implement targeted reforms and policies that prioritize the well-being of their citizens and pave the way for a more resilient and prosperous future.