At the African Development Bank Group’s (AfDB) annual meetings held in Nairobi on Thursday, the latest African Economic Outlook was unveiled, highlighting robust growth prospects for the majority of the continent’s nations. According to the report, 41 of Africa’s 54 countries are projected to see stronger economic growth in 2024 than in the previous year, positioning the continent as the second fastest-growing region globally, just behind developing Asia.
The report emphasized the remarkable growth potential of Africa but also noted the critical need for improved governance, transparency, accountability, and management of natural resources to sustain this growth. While the continent continues to advance, the persistent issue of energy deficiency poses a significant challenge, with 75% of the world’s population without access to electricity residing in Africa, equating to more than 600 million people.
In terms of natural resources, Africa is rich in critical and rare earth minerals, making substantial contributions to global production—80% of platinum and 77% of cobalt, among others. In 2021, African economies earned approximately $277 billion in resource rents, which accounted for an average of 11.4% of the GDP of the beneficiary countries. The report underscores that if managed and harnessed effectively, these resources could significantly bolster domestic resources for financing structural transformations.
However, the continent faces hurdles in achieving Sustainable Development Goals by the 2030 deadline, with predictions indicating that Africa will host nearly 87% of the world’s extreme poor if current trends continue. AfDB President Dr. Akinwumi Adesina expressed pride in the growth projections but acknowledged the challenges, stressing the need for action to ensure resources benefit the continent’s people and address climate change effectively.
Professor Kevin Chika Urama, AfDB’s Chief Economist and Vice President, pointed out that investing in both hard and soft infrastructure is crucial for accelerating Africa’s structural transformation. He likened these investments to “two wings of an aircraft,” essential for the continent’s ascent.
Regionally, the economic performance varies:
– East Africa is forecasted to see real GDP growth rise from 1.5% in 2023 to 4.9% in 2024.
– Central Africa expects moderate growth, while West Africa anticipates an increase from 3.6% to 4.2% in 2024.
– North Africa’s growth is projected to decline slightly before rebounding, whereas Southern Africa expects a modest uptick largely due to South Africa’s projected growth.
The report also calls for a reform of the global financial architecture to give Africa a greater voice in multilateral development banks and international financial institutions, reflecting its substantial contribution to global GDP and rich natural resource base. This reform is deemed necessary to close Africa’s financing gap, estimated at $402.2 billion annually until 2030, for necessary structural transformations. The AfDB is advocating for leveraging private sector financing, reforming multilateral development banks, and enhancing domestic resource mobilization to meet these ambitious goals.
Source: ESI Africa
