IMF projects 3.8% growth for SSA in 2024

The International Monetary Fund (IMF) has projected a growth of 3.8 per cent for Sub-Saharan Africa in 2024, up from 3.4 per cent in 2023. This growth comes after a peak of almost 10 per cent in late 2022. Abebe Selassie, the Director of the African Department at the IMF, highlighted that the region's economy is experiencing a broad-based recovery, with two-thirds of countries showing an acceleration in growth. This positive trend is coupled with a decrease in inflation and improvements in fiscal deficits, stabilizing debt levels across the region. Selassie emphasized the need for countries to address key challenges and prioritize strategic actions to sustain this growth trajectory. For countries like Nigeria, diversifying the economy away from oil reliance, enhancing revenue mobilization, and implementing monetary reforms are crucial. He lauded Nigeria's efforts in these areas and stressed the importance of sustaining macroeconomic reforms. Furthermore, Selassie highlighted the significance of fiscal consolidation for countries to build fiscal buffers. He advised policymakers to prioritize tax revenue collection over spending cuts to strike a healthy balance, enabling the allocation of resources to crucial development needs. Additionally, he acknowledged the role of concessional financing in supporting countries during times of high external financing costs. Addressing concerns about elections in Africa, Selassie noted that while elections are essential for democracy, they can sometimes divert attention from necessary reforms. While he praised South Africa for minimal electoral spending cycles historically, he cautioned countries against overspending during election periods. Regarding debt sustainability, Selassie commended countries like Ghana for taking proactive steps to address debt challenges, including seeking debt relief and initiating debt re-profiling. He urged creditors to collaborate swiftly to provide relief and stability for countries like Ghana. When discussing the impact of debt on economic growth, Selassie emphasized that high debt servicing costs divert resources from critical areas, hindering overall growth. Additionally, the IMF is actively assisting southern African countries affected by the drought, offering support to nations like Zambia and Malawi to cope with the adverse effects of El Nino. In conclusion, Selassie reiterated the IMF's commitment to providing financial support to Sub-Saharan Africa, with over $60 billion allocated to the region since 2020. The IMF stands ready to offer further assistance to countries seeking help and emphasized the importance of addressing debt sustainability, fiscal consolidation, and diversification to foster economic resilience in the region.