African Economy to Grow by 3.8% in 2024 – Afreximbank
The African Export-Import Bank has projected that the African economy will grow on average by 3.8 per cent this year.
This was disclosed in the Economic Outlook Report 2024 launched at the ongoing Afreximbank Annual Meetings in Nassau, The Bahamas on Wednesday.
This projection aligns with the International Monetary Fund’s anticipated growth for sub-Saharan Africa.
It said, “Growth will rise from 3.4 per cent in 2023 to 3.8 per cent in 2024, with nearly two-thirds of countries anticipating higher growth. Economic recovery is expected to continue beyond this year, with growth projections reaching 4.0 per cent in 2025.”
At the annual meeting, the report titled ‘A Resilient Africa: Delivering Growth in a Turbulent World,’ projected that “African economies will grow on average by 3.8 per cent in 2024 – slightly ahead of predicted global growth of 3.2 per cent – prior to increasing by 4 per cent in 2025.”
The Afreximbank’s Group Chief Economist and Managing Director of Research and International Cooperation, Dr Yemi Kale, said some global challenges had undermined the performance of Africa’s trade, which contracted by 6.3 per cent in 2023 after expanding by 15.9 per cent in 2022.
He added that intra-African trade expanded by 3.2 per cent over the same period.
Kale, a former statistician-general of Nigeria, said, “This performance is reflective of the resilience of the African economy and the potential impact of the African Continental Free Trade Area’s single market for the continent as a tool to protect them from global shocks.
“Our analysis in the report also revealed large untapped potential in intra-African trade, especially concerning machinery, electricity, motor vehicles, and food products.”
The Afreximbank report also indicated that African economies faced several risks, including increasing levels of sovereign debt and associated sustainability risks and excessive exposure to adverse terms-of-trade shocks.
According to the report, other challenges confronting the continent are escalating geopolitical tensions in some cases, volatile domestic political environments in certain African countries, high commodity prices and inflationary pressures, and potential food insecurity.
Despite those challenges, the outlook for the continent remained positive with the report anticipating an improvement in most macroeconomic indicators in 2024 and 2025.
“Growth in the continent is projected to be higher than the global average, and although inflation is currently high, it is expected to decrease, with this downward trend continuing into 2025,” the bank said.
Meanwhile, in the second report launched at the annual meeting, the African Trade Report 2024, titled ‘Climate Implications of the AfCFTA Implementation’, Kale stated that based on the report, AfCFTA offered a path to achieving the developmental goals of African nations while also addressing climate change concerns.
He remarked, “One group believes that increased urbanisation and industrialisation associated with the AfCFTA will worsen carbon emissions, and the second group believes that by emphasising intra-African trade and reducing extra-African trade, carbon emissions will be eliminated through shorter shipping distances.”
The Governor of Lagos State, Babajide Sanwo-Olu, in his closing remarks on the first day of the meetings and third AfriCaribbean Trade and Investment Forum, highlighted the role of AfCFTA, saying it symbolised a pivotal initiative that requires collaboration between national and subnational levels to succeed.
“Despite challenges, the AfCFTA aims to create a unified trade channel for African countries. By leveraging partnerships and embracing African solutions, we could build a prosperous future for the continent.
“Lagos truly offers an inspiring model of what is possible when Africa thinks big and thinks ahead. In the near future, our ambition is to, in addition to what we are already accomplishing, become a strong and solid link between Africa and the Caribbean, building on longstanding historical connections and modernising them into a partnership that is an unstoppable global force.
“We already have so much in common, and if we synergise properly, there is no limit to how far we can go. This is where Afreximbank comes in, as an inspiration, an enabler, a facilitator, and a financier.”
According to the governor, they have established themselves as an excellent facilitator of bridge-building between Africa and the Caribbean.
“Together, we will continue to drive progress and innovation for the benefit of all Africans,” the governor stated.
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