Africa Emerges as Second-Fastest Growing Region – Report

The African Development Bank Group, in its latest Macroeconomic Performance and Outlook (MEO) report, has noted that Africa is on the verge of becoming the second-fastest growing region after Asia.

The report further states that the continent will account for eleven of the world’s 20 fastest-growing economies in 2024. The overall real gross domestic product (GDP) growth for Africa is expected to average 3.8% in 2024 and 4.2% in 2025. These figures are higher than the projected global averages of 2.9% and 3.2% for the same years.

Africa dominates the list of the world’s 20 fastest-growing economies, with the report forecasting stronger growth for the continent in 2024, outpacing the projected global average.

“Despite the challenging global and regional economic environment, 15 African countries have recorded output expansions of more than 5%,” said Bank Group President Dr. Akinwumi Adesina. He emphasized the need for larger pools of financing and several policy interventions to further boost Africa’s growth.

The Africa Macroeconomic Performance and Outlook is a biannual publication released in the first and third quarters of each year. It complements the existing African Economic Outlook (AEO), which focuses on key emerging policy issues relevant to the continent’s development. The MEO report provides an up-to-date, evidence-based assessment of the continent’s recent macroeconomic performance and its short- to medium-term outlook amid dynamic global economic developments.

The latest report calls for cautious optimism given the challenges posed by global and regional risks. These risks include rising geopolitical tensions, increased regional conflicts, and political instability, all of which could disrupt trade and investment flows and perpetuate inflationary pressures.

President Adesina also highlighted that fiscal deficits have improved, as a faster-than-expected recovery from the pandemic has helped shore up revenue. He explained further: “This has led to a stabilization of the average fiscal deficit at 4.9% in 2023, the same as in 2022, but significantly less than the 6.9% average fiscal deficit of 2020. This stabilization is also due to fiscal consolidation measures, especially in countries with elevated risks of debt distress.”

He cautioned that, with the global economy mired in uncertainty, the fiscal positions of the African continent will continue to be vulnerable to global shocks.

The report indicates that the medium-term growth outlook for the continent’s five regions is slowly improving, pointing to the continued resilience of Africa’s economies.

Presenting the key findings of the report, the African Development Bank’s Chief Economist and Vice President, Prof. Kevin Urama, stated: “Growth in Africa’s top-performing economies has benefited from a range of factors, including declining commodity dependence through economic diversification, increased strategic investment in key growth sectors, rising public and private consumption, and positive developments in key export markets.”

He added, “Africa’s economic growth is projected to regain moderate strength as long as the global economy remains resilient, disinflation continues, investment in infrastructure projects remains buoyant, and progress is sustained on debt restructuring and fiscal consolidation.”