Sub-Saharan Africa Regional Market Outlook:

Jan 28, 2024

According to the World Bank’s Global Economic Prospects 2024, growth in the Sub-Saharan Africa region is expected to rebound to 3.8% in 2024, from the estimated growth rate of 2.9% recorded in 2023 mainly attributable to the easing inflationary policies, reduction in prices of key imports such as fertilizers, metal and fuel, improved fiscal support and the expected increase in domestic demand.

However, the projections remain subject to key downward risks such as:

  • Monetary Policy tightening across the region to address inflation which may lead to reduced economic activity in the region. Additionally, expected policy hikes in developed economies such as the US are to put pressure on the region’s investment landscape as a result of increased capital outflows to more attractive markets,
  • Persistent global inflationary pressures, which may lead to the deterioration of financial conditions in the region and high cost of living due to the high prices necessitating aggressive policy rate hikes in the region,
  • The high debt levels in the region as borrowing persists in the region due to the ever-present fiscal deficits in the region. Additionally, the increased debt servicing costs due to the sustained currency depreciation of the local currencies against the Dollar are expected to put more pressure on the region’s growth as most of the region’s debt is dollar-denominated, and,
  • Further rise in global or regional instability, such as the possible escalation of the con´Čéict in the Middle East, which could drive up global energy and food prices which would in turn affect growth in the Sub-Saharan Africa region considering that most of the countries in the region are net importers.

In Nigeria, the region largest economy, growth is projected to accelerate 3.3% in 2024, from the estimated growth of 2.9% in 2023 attributable to the increase in oil production as witnessed in 2023 However, services growth weakened partly driven by a disruptive currency demonetization policy in the first quarter of 2023. Additionally, growth in South Africa is expected to increase slightly to 1.3% in 2024, from the estimated growth of 0.7% in 2023. The slowed growth in South Africa is attributable to the weaker demand in the context of weak job creation, high prices, and monetary policy tightening in the country, coupled with the persistent energy crisis with power outages hitting record highs in 2023, holding back manufacturing and mining production. Moreover, growth in the region is expected to be hampered by the high debt levels, stifled demand, persistent depreciation of local currencies as well as the increased cases of corruption in the region as indicated by the Corruption Perceptions Index. Growth in the Eastern African region is expected to remain subdued due to the witnessed political clashes in Ethiopia, South Sudan and the Democratic Republic of Congo, coupled with persistent unfavourable weather conditions which continue to stifle agricultural production.

The table below highlights the real GDP forecasts of select Sub - Saharan Africa countries;

Cytonn Report: Real GDP Forecasts of Select Sub - Saharan Africa countries

Country

2023e

2024f

Senegal

4.1%

8.8%

Rwanda

6.9%

7.5%

Ethiopia

5.8%

6.4%

Uganda

5.3%

6.0%

Tanzania

5.1%

5.5%

Kenya

5.0%

5.2%

Mauritius

5.0%

4.6%

Nigeria

2.9%

3.3%

Angola

0.5%

2.8%

Ghana

2.3%

2.8%

South Africa

1.9%

1.4%

Average

2.9%

3.8%

Note: e - estimate, f – forecast. Data Source: World Bank