Sub-Saharan Africa on the Path to Recovery, IMF Reports
Washington D.C., April 19, 2024
The International Monetary Fund (IMF) today unveiled its latest Regional Economic Outlook for Sub-Saharan Africa, delivering a cautiously optimistic forecast for the region amidst ongoing economic challenges.
At a press briefing, led by Abebe Aemro Selassie, Director of the IMF’s African Department, he highlighted significant strides in economic recovery following several years of turmoil.
According to the IMF, economic growth in Sub-Saharan Africa is expected to accelerate to 3.8 percent in 2024, up from 3.4 percent the previous year. A remarkable decrease in inflation — from nearly 10 percent in late 2022 to about 6 percent in early 2024 — was noted as a key factor contributing to the region’s economic stability.
Mr Selassie attributed this improvement to effective monetary policies implemented by central banks across the region in our own Bank of Ghana headed by Dr Ernest Kwamina Yedu Addison a Ghanaian economist who serves as the current and 15th governor of the Bank of Ghana, including measures that have slowed food price increases.
The IMF report also noted significant progress in fiscal consolidation efforts, with median public debt stabilizing at around 60 percent of GDP, thereby ending a decade-long upward trajectory. Furthermore, easing global financial conditions have allowed several countries within the region to re-enter international markets after a two-year break.
Despite these positive developments, challenges remain. Mr Selassie the IMF African Department Chief, warned that many countries are still grappling with high borrowing costs and limited funding sources.
Government interest payments have risen sharply, now representing about 12 percent of revenue, more than double that of a decade ago. Additionally, the availability of official development assistance has diminished, compounding financial pressures on these economies.
To address ongoing and future challenges, Mr Selassie outlined three key policy priorities for governments in the region: enhancing public finances with a focus on domestic revenue mobilization, continuing efforts to reduce inflation, and implementing reforms to boost skill development, innovation, business environment, and trade integration.
The IMF African Department Director emphasised the necessity of sustained international support, noting that the IMF has provided $58 billion in financing to the region since the onset of the pandemic.
But He expressed optimism that, with the right policy choices, this pivotal moment could mark the beginning of what he termed “the African century.”
Meanwhile, NorvanReports talks with some stakeholders, they largely agree with the IMF on the future of Sub-Saharan Africa’s bouncing back to the growth and prosperity track, but they give a sense of cautious optimism about the region’s economic trajectory, underscoring the importance of continued strategic reforms and international collaboration in securing future prosperity for the citizen’s that live in the region.
