On October 25, 2024, the International Monetary Fund (IMF) released its Regional Economic Outlook for sub-Saharan Africa. The briefing highlighted several key points regarding the economic situation in the region.
The IMF noted that economic growth in sub-Saharan Africa remains subdued, with projections of 3.6 percent this year and a slight increase to 4.2 percent next year. This growth rate is insufficient to significantly reduce poverty or address developmental challenges. "Despite lackluster average growth, nine of the world's 20 fastest-growing economies are in sub-Saharan Africa—and those with more diversified economic structures are the ones doing better," said an IMF representative.
The report also pointed out improvements in macroeconomic imbalances, such as declining inflation and narrowing budget deficits. Debt-to-GDP ratios are stabilizing at high levels, which are seen as positive signs for the region's economic health.
However, the IMF stressed the challenging political and social environment that governments face while implementing necessary reforms. The cost-of-living crisis, particularly due to higher food prices, has intensified strain on households. Governments are adjusting fiscally by increasing revenue and compressing spending but continue to face elevated interest burdens.
The report emphasized that making reforms acceptable requires effective communication and consultation, improved governance to rebuild public trust, and measures promoting inclusive growth through job creation.
The IMF also highlighted its intensified engagement in the region with ongoing programs and financial arrangements amounting to over $60 billion since 2020. However, declining official development assistance poses challenges to the effectiveness of this support.
Countries like Benin, Côte d'Ivoire, Kenya, Senegal, and Cameroon have returned to markets this year; however, access remains limited for many others amid costly financing conditions.
The upcoming Regional Economic Outlook will delve into policy considerations for strategies amid diverse circumstances and constrained financing.