By Ghana’s economy and other countries in sub-Saharan Africa are anticipated to experience a promising growth of 3.8 percent in 2024.
The International Monetary Fund’s (IMF) 2024 Regional Economic Outlook for sub-Saharan Africa forecasts that economies in the region will elevate from the 3.4 percent growth recorded in 2023 to 3.8 percent in 2024.
The outlook suggests that economic recovery will persist beyond 2024, with growth projections reaching 4.0 percent in 2025. Moreover, inflation rates have nearly halved, public debt ratios have generally stabilized, and numerous countries have issued Eurobonds this year, marking the end of a two-year hiatus from international markets.
Despite these positive forecasts, the region is expected to remain susceptible to global external shocks, as well as the risks posed by escalating political instability and frequent climate events.
To address these vulnerabilities, the IMF advocates for the adoption and enhancement of prudent public finance management strategies that do not compromise development goals. Additionally, it emphasizes the importance of monetary policies aimed at ensuring price stability and the implementation of structural reforms to diversify funding sources and economies.
Catherine Pattillo, Deputy Director in the IMF’s African Department, voiced concerns about the impact of numerous natural disasters in southern and eastern Africa during an interview with Bernard Avle on the Citi Breakfast Show on Citi FM. She highlighted that these disasters could potentially affect the economic projections for the region.
“In Southern Africa, they are facing a really devastating drought and in East Africa, you are seeing a lot of flooding in a number of countries and so this impact is going to be felt and given the potential impact on the agricultural sector, it could mean that we will have to look at those growth projections again.”
Regarding the countries anticipated to experience a decline in growth, she clarified that this isn’t necessarily due to borrowing, as commonly assumed. Rather, it’s contingent on how the borrowed funds are utilized.
“The issue with borrowing is not so much about whether it is a good or bad thing per se but how you use the money and whether you can generate growth and both FX and domestic revenue to make sure that you can capture the rate of return and be able to stay stable.”
