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Africa’s remarkable growth potential

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Africa’s remarkable growth potential
African countries need to invest in developing the skills of young entrepreneurs in Africa. Image credit: Leon Louw for WhyAfrica.

Africa’s remarkable growth potential

The latest AfDB African Economic Outlook report describes Africa’s growth potential as remarkable.    

Africa will retain its 2023 ranking as the second fastest-growing region after developing Asia in 2024 and 2025.

According to the African Development Bank Group’s African Economic Outlook, 41 countries in Africa are projected to experience stronger growth rates in 2024 than they did in 2023.

Growth prospects vary across Africa’s regions, reflecting differences in economic structure, commodity dependence, and policies.

Africa’s remarkable growth potential
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Africa’s remarkable growth potential

Fastest growth in East Africa

East Africa, the continent’s fastest-growing region, will see real GDP growth rising from an estimated 1.5% in 2023 to 4.9% in 2024 and 5.7% in 2025. The downward revision of 0.2 percentage point for 2024 compared with the forecast in the January 2024 Africa’s Macroeconomic Performance and Outlook (MEO) (https://apo-opa.co/4bY0sqN) is due to larger-than-expected contractions in Sudan and South Sudan following the ongoing conflict in the former.

Moderate growth in Central Africa

Growth in Central Africa is forecast to moderate from 4.3% in 2023 to 4.1% in 2024 before improving strongly to 4.7% in 2025. The upgraded forecast is due to expectations of stronger growth in Chad and the Democratic Republic of Congo (DRC) because of favourable metal prices.

Growth picks up in West Africa

Growth is projected to pick up in West Africa, rising from an estimated 3.6% in 2023 to 4.2% in 2024 and consolidating at 4.4% the following year. This is an upgrade of 0.3 percentage point for 2024 over the January MEO 2024 projections, reflecting stronger growth in the region’s large economies—Côte d’Ivoire, Ghana, Nigeria, and Senegal.

Decline in North Africa

In North Africa, growth is projected to decline from an estimated 4.1% in 2023 to 3.6% in 2024 and 4.2% in 2025, with a downward revision of 0.3 percentage point for 2024 from the January 2024 MEO. Except for Libya and Mauritania, growth has been revised downward for all other countries in the region.

Slightly higher growth in Southern Africa

Growth in Southern Africa is projected to pick up slightly from an estimated 1.6% in 2023 to 2.2% in 2024 and firm up to 2.7% in 2025. The growth rates for 2024 and 2025 show an upgrade of 0.1 percentage point over the January 2024 projections, mainly reflecting a 0.7 percentage point increase in South Africa’s projected growth. Due to South Africa’s larger weight in the region, the upgraded growth forecast offset the combined effect of downward revisions in Angola, Botswana, Lesotho, Zambia, and Zimbabwe.

Africa’s future is bright but challenges remain

African Development Bank President Dr Akinwumi Adesina says that although the growth projections are encouraging, many challenges remain.

“Africa’s future is bright, but there needs to be a focus on good governance, transparency, accountability, and management of natural capital. Resources must be used to benefit the people of Africa. All this cannot happen unless we deal with the issue of climate change,” says Adesina.

The report warns that Africa is off track to meet all the Sustainable Development Goals by 2030.

It argues that unless corrective action is taken, including to reverse the steepening poverty curve, Africa will be home to almost 9 out of 10 (or 87%) of the world’s extreme poor by 2030.

Chief Economist and Vice President of the African Development Bank, Prof Kevin Chika Urama, underscores why strategic policies and firm political commitment are key to the effective use of resource wealth for domestic revenue generation.

He describes hard infrastructure like roads, railways and bridges, and soft infrastructure like knowledge and institutional governance capacity, as “two wings of an aircraft”.

“Investing in productive infrastructure is key to accelerating Africa’s structural transformation,” says Urama.

Africa’s remarkable growth potential

Africa’s remarkable growth potential
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