African economies to grow 3.4% in 2024; more equitable growth needed to reduce poverty: World Bank

Increased private consumption and declining inflation are supporting an economic rebound in Sub-Saharan Africa, but the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence, according to World Bank's latest Africa's Pulse report.

Increased private consumption and declining inflation are supporting an economic rebound in Sub-Saharan Africa, but the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence, according to World Bank's latest Africa's Pulse report. The multinational bank suggested transformative policies were needed to address deep-rooted inequality to sustain long-term growth and effectively reduce poverty.

According to the world bank report, growth in the region is expected to rebound in 2024, rising from a low of 2.6 percent in 2023 to 3.4 percent in 2024, and 3.8 percent in 2025. However, this recovery remains tenuous, it asserted.

While inflation is cooling across most economies, falling from a median of 7.1 to 5.1 percent in 2024, it remains high compared to pre-COVID-19 pandemic levels. Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems, and face unsustainable debt burdens.

Overall, the report underscored that despite the projected boost in growth, the pace of economic expansion in the region remained below the growth rate of the previous decade (2000-2014) and is insufficient to have a significant effect on poverty reduction. Moreover, due to multiple factors including structural inequality, economic growth reduces poverty in Sub-Saharan Africa less than in other regions.

"Per capita GDP growth of 1 percent is associated with a reduction in the extreme poverty rate of only about 1 percent in the region, compared to 2.5 percent on average in the rest of the world," said Andrew Dabalen, World Bank Chief Economist for Africa. "In a context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone. It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society."

The World Bank's Africa's Pulse report called for several policy actions to foster stronger and more equitable growth. These include restoring macro-economic stability, promoting inter-generational mobility, supporting market access, and ensuring that fiscal policies do not overburden the poor. (ANI)

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