African Economic Outlook 2024

The theme of the 2024 African Economic Outlook is Driving Africa’s Transformation: The Reform of the Global Financial Architecture.

Despite strong economic performance and remarkable resilience, structural transformation in Africa has been slow and uneven, and addressing this will require calling bold reforms of the global financial architecture to meet Africa’s development financing needs

The African Economic Outlook 2024 is being published as African countries continue to contend with significant structural challenges and multiple severe shocks, including heightened food and energy prices driven by geopolitical tensions such as Russia’s invasion of Ukraine, climate issues affecting agriculture and energy production, and persistent political instability. This challenging environment has led to a slowdown in Africa’s real GDP growth, which dropped to 3.1 percent in 2023 from 4.1 percent in 2022. Looking forward, however, the economic outlook is more positive, with growth expected to increase to 3.7 percent in 2024 and 4.3 percent in 2025, highlighting the strong resilience of African economies. This growth rebound will be underpinned by expected improvements in global economic conditions and effective policy measures. With these outturns, Africa will remain the second-fastest growing region globally, with 40 countries set to achieve post higher growth rates relative to 2023 levels.

Despite these positive trends, Africa still faces challenges in achieving sustainable economic and social transformation. Historical growth rates have been insufficient to offset population increases, leading to minimal gains in per capita GDP. Structural transformation has been limited, with economies heavily reliant on traditional, low-productivity sectors like agriculture or low-skilled services for growth and employment. To achieve substantial structural transformation, Africa needs to focus on strategic investments in key Sustainable Development Goal areas such as education, energy, productivity-enhancing technology and innovation, and productive transport infrastructure. The financing gap for these investments is vast, estimated at about US$402 billion annually until 2030, and will require scaling up domestic resource mobilization and fostering private sector investment. However, given the enormity of resources, scaling up external financial flows as complementary sources of financing is crucial. In that respect, the report underscores the urgency to reform the global financial architecture to facilitate fair, sustainable, and inclusive resource allocation, essential for financing Africa’s development goals.