African countries dominate top GDP growth spots this year
TLDR
- Sub-Saharan Africa has a glimmer of hope despite economic challenges, with six of the top-10 performing economies in 2024 projected to be from the region.
- Niger, Senegal, Rwanda, Cote d’Ivoire, Burkina Faso, and Benin are expected to drive positive economic growth in Sub-Saharan Africa.
- While South Africa and Nigeria face economic issues, the collective strength of the top-performing economies is making a positive impact on poverty and inequality in the region.
Despite facing economic challenges, there is a glimmer of hope for Africa, particularly in Sub-Saharan Africa. According to the International Monetary Fund (IMF), six of the top-10 performing economies in the world in 2024 are projected to be from Sub-Saharan Africa.
The economies are Niger, Senegal, Rwanda, Cote d’Ivoire, Burkina Faso and Benin. While these economies may be smaller individually, they contribute to a more optimistic outlook for the region. The economic performances of South Africa and Nigeria, which together constitute two-fifths of Africa's $2 trillion economy, are not as robust.
Nevertheless, the collective strength of the top-performing economies is making a positive impact in a region still grappling with issues of poverty and inequality. Eight of Africa’s top 10 largest economies, accounting for an additional 40% of regional GDP, are expected to grow by a robust 5% on average.
Key Takeaways
The external environment for Africa presents challenges, but the potential for growth turnaround in both South Africa and Nigeria lies in crucial reforms. Nigerian President Bola Tinubu has taken aggressive measures to ease the country's foreign exchange regime and eliminate costly fuel subsidies. In South Africa, grappling with an energy crisis, there are tentative steps towards improving electricity supply, and this progress is expected to continue. However, analysts express caution about Africa's immediate economic outlook. The anticipated growth is recovering from a low base following setbacks during the pandemic, putting strain on public finances and leaving many countries burdened with heavy debt. This has already led to defaults in Ghana, Zambia, and Ethiopia, prompting warnings from the International Monetary Fund (IMF) that other nations remain at risk. Additionally, access to foreign capital markets is effectively closed for some countries in the region. Despite the challenges, the potential for growth turnaround through reforms is a key focus for economic recovery in both South Africa and Nigeria.
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