Africa dominates list of 20 fastest-growing economies

Africa Poised for Economic Expansion with 11 of the 20 Fastest-Growing Economies Globally in 2024

Africa is set to dominate the list of the world’s fastest-growing economies in 2024, with 11 countries from the continent predicted to be among the top 20 globally, according to the African Development Bank (AfDB) Group’s latest Macroeconomic Performance and Outlook (MEO) report. The report highlights the continent’s economic resilience, forecasting an average real gross domestic product (GDP) growth of 3.8% in 2024, which is expected to rise to 4.2% in 2025. These figures surpass the global growth averages of 2.9% and 3.2% for the same years, signaling Africa’s position as a significant player in the global economy.

Africa: The Second-Fastest Growing Region Globally

Africa is projected to remain the second-fastest-growing economic region in the world, trailing only Asia. Among the standout performers are 11 African nations that are expected to experience robust growth rates:

• Niger (11.2%)
• Senegal (8.2%)
• Libya (7.9%)
• Rwanda (7.2%)
• Côte d’Ivoire (6.8%)
• Ethiopia (6.7%)
• Benin (6.4%)
• Djibouti (6.2%)
• Tanzania (6.1%)
• Togo (6.0%)
• Uganda (6.0%)

These countries are being lauded for their strong economic performance, which is attributed to factors such as diversification of revenue streams, strategic investments in key sectors, and growing consumption at both public and private levels.

Challenges and Opportunities Amid Global Risks

Despite this promising growth, the AfDB’s report emphasizes cautious optimism. Several risks loom over the continent, including geopolitical tensions, regional conflicts, and political instability, all of which could disrupt trade, investment, and supply chains. These challenges also contribute to inflationary pressures, threatening to undermine Africa’s economic progress.

Dr. Akinwumi Adesina, President of the AfDB Group, highlighted the significance of policy interventions and larger pools of financing to sustain and accelerate growth. “Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than five per cent,” Dr. Adesina stated. He also pointed out that fiscal deficits across the continent have improved. This progress has been aided by faster-than-expected recovery from the COVID-19 pandemic, which has bolstered revenues and reduced average fiscal deficits.

The fiscal deficit has stabilized at 4.9% in 2023, a significant improvement compared to the 6.9% recorded in 2020 during the peak of the pandemic. This stabilization reflects the impact of fiscal consolidation measures, particularly in countries facing high risks of debt distress. However, Dr. Adesina cautioned that the fiscal positions of African economies remain vulnerable to global economic shocks, especially as uncertainty continues to cloud the global economy.

Insights from the MEO Report

The Macroeconomic Performance and Outlook report, released biannually in the first and third quarters of the year, provides an evidence-based analysis of Africa’s recent economic performance and medium-term outlook. It serves as a companion publication to the African Economic Outlook (AEO), which focuses on emerging policy issues critical to the continent’s development.

According to the AfDB’s Chief Economist and Vice President, Professor Kevin Urama, Africa’s economic resilience is increasingly evident in its top-performing economies. “Growth in Africa’s top-performing economies has benefitted from a range of factors, including declining commodity dependence through economic diversification, increasing strategic investment in key growth sectors, rising public and private consumption, as well as positive developments in key export markets,” Urama noted.

He further emphasized that many African countries are actively reducing their reliance on commodities, investing in infrastructure, and fostering innovation to support long-term economic stability. These efforts have not only boosted growth but have also positioned the continent as a critical player in global markets.

Regional Growth Trends

The MEO report also offers a detailed analysis of the medium-term growth prospects for Africa’s five regions. The findings suggest gradual improvements across all regions, pointing to the continued resilience of African economies despite global uncertainties. This resilience is credited to a combination of factors, including domestic reforms, strategic investments, and enhanced regional cooperation.

A Call for Strategic Action

While the growth trajectory for Africa remains promising, the AfDB report underscores the need for African governments and institutions to implement strategic measures to address existing challenges. These include improving governance, enhancing regional stability, and scaling up investments in infrastructure, education, and healthcare. The report also calls for policies aimed at mitigating external risks, such as diversifying export markets and strengthening trade relations.

In conclusion, Africa’s economic outlook for 2024 and beyond reflects a continent on the rise. With 11 of the world’s 20 fastest-growing economies, Africa’s role in shaping the global economic landscape is becoming increasingly significant. However, sustaining this momentum will require careful policy planning, investments in key growth sectors, and resilience in the face of global and regional risks. The AfDB’s report serves as both a celebration of Africa’s economic progress and a roadmap for addressing the challenges that lie ahead.