SUB-SAHARAN Africa’s economy is projected to remain subdued at 3.6 per cent in 2024 and unchanged from 2023 growth, says the International Monetary Fund (IMF).
The region’s economy will, however, experience a modest pickup to 4.2 per cent growth in 2025.
The international fund lender forecasted this in its latest Regional Economic Outlook for Sub-Saharan Africa, published on Friday, October 25.
It shows that countries in the region are still grappling with macroeconomic imbalances and tight financing conditions amid rising social pressures, leaving policymakers facing difficult choices in implementing reforms.
“Sub-Saharan African countries are navigating a complex economic landscape marked by both progress and persistent vulnerabilities,” the director of the IMF’s African Department, Abebe Aemro Selassie, said in a statement seen by The ICIR.
Selassie noted that while many of the region’s countries are among the world’s fastest-growing economies, resource-intensive countries —particularly oil exporters like Nigeria — continue to struggle with lower growth rates.
“Inflation is declining but remains in double digits in nearly one-third of countries. Public debt has stabilised at a high level, with rising debt service burdens crowding out resources for development spending.
“While we are seeing some improvement in macroeconomic imbalances, growth remains insufficient to significantly reduce poverty or address substantial developmental challenges in the region,” the IMF director added.
The regional economic report includes focused notes addressing critical issues facing the region, highlighting the urgent need for job creation, the economic divergence between resource-rich and non-resource-rich countries, and the positive effects of striving for greater gender equality.
Against this backdrop, Selassie pointed to priorities for policymakers in the region.
He said the policy mix should be consistent with the size of macroeconomic imbalances while taking into account the political economy constraints that will affect the pace of reforms.
“Countries with high macroeconomic imbalances are more likely to resort to relatively large and frontloaded fiscal reforms, given the tight financing constraints. The need for financial support from the international community is most acute for this group.
“For countries with lower imbalances, policymakers should consider easing monetary policy toward a more neutral stance, while rebuilding fiscal and external buffers over time,” Selassie said.
He maintained that policymakers need to focus on designing socially acceptable reforms, including effective communication and consultation strategies and measures to protect the most vulnerable.
“With continued efforts, sub-Saharan Africa can address its current challenges and move towards more sustainable and inclusive growth,” Selassie said.
He added, however, that the path ahead requires careful policy calibration and a strong commitment to implementing necessary reforms while managing social pressures.
In the report, Nigeria’s economic growth is expected to remain subdued at 2.9 per cent in 2024 from the same level it was in 2023.
However, it is to expand to 3.2 per cent in 2025, slower than 3.3 per cent in 2022 and far from the 3.6 per cent in 2021.
In 2020, Nigeria’s economy nosedive into negative territory when it declined to -1.8 per cent from 3.0 per cent in 2019.
In its latest World Economic Outlook (WEO) report released on Tuesday, October 22, the IMF forecast Nigeria’s headline inflation to drop to 25 per cent in 2025, The ICIR reported on Wednesday, October 23.
The Nigerian headline inflation, which worsened to 32.70 per cent in September, is still above the target the IMF maintained.
