Sub-Saharan Africa is experiencing an economic rebound driven by increased private consumption and declining inflation. However, this recovery is fragile due to global economic uncertainty, mounting debt obligations, natural disasters, and growing conflict and violence, as per the latest report from the World Bank titled Africa’s Pulse. To sustain long-term growth and poverty reduction, transformative policies are essential to address entrenched inequality.
The report forecasts a growth rebound in 2024, with a projected increase from 2.6 percent in 2023 to 3.4 percent in 2024, and 3.8 percent in 2025. Despite this positive outlook, challenges persist. Inflation is decreasing but remains higher than pre-pandemic levels, while public debt growth is slowing and many African governments face unsustainable debt burdens and liquidity issues.
While growth is expected to improve, the report emphasizes that the pace of economic expansion in Sub-Saharan Africa lags behind the previous decade’s growth rates and is insufficient to significantly impact poverty reduction. Structural inequality hampers poverty reduction efforts in the region compared to other areas, with a slower poverty reduction rate associated with per capita GDP growth.
World Bank Chief Economist for Africa, Andrew Dabalen, highlighted the need for policies that enhance the private sector’s capacity to create jobs and reduce poverty. External resources for African governments are shrinking, with increased costs, geopolitical tensions, and climate shocks posing risks to economic stability and food security for millions of people in the region.
Inequality remains a pressing issue in Sub-Saharan Africa, with disparities in access to basic services and income opportunities. The region ranks second globally in terms of inequality, accentuated by regressive fiscal policies and obstacles to economic participation. Addressing these challenges is crucial for a more prosperous future.
The report recommends policy actions to promote inclusive growth, including restoring economic stability, facilitating market access, and ensuring fiscal policies are not burdensome for the poor. Addressing structural constraints across the economy is key to fostering a more equitable and prosperous future in the region.
Distributed by APO Group on behalf of The World Bank Group.