World Bank cuts 2024 growth forecast for sub-Saharan Africa to 3% 

However, growth is expected to remain comfortably above last year’s 2.4 percent thanks to higher private consumption and investment, the bank said in its latest regional economic outlook report, Africa’s Pulse.

“This is still a recovery that is basically in slow gear,” Andrew Dabalen, chief economist for the Africa region at the World Bank, told a media briefing on Monday.

The report forecasts next year’s growth at 3.9%, above its previous prediction of 3.8%. Moderating inflation in many countries will allow policymakers to start lowering elevated lending rates, the report said.

The report noted, however, that the growth forecasts still face serious risks from armed conflict and climate events such as droughts, floods, and cyclones.

“Cumulatively, if that were to continue for a long time, it would be catastrophic,” Dabalen warned.

Dabalen noted that many economies in the region were starved of public and private investments and a recovery in foreign direct investments that started in 2021 was still tepid.

“The region needs much, much larger levels of investments to be able to recover faster… and be able to reduce poverty. 

“Growth across the region is also hamstrung by high debt service costs in countries like Kenya, which was rocked by deadly protests against tax hikes in June and July. 

“There are staggering levels of interest payments,” Dabalen said, attributing this to a shift by governments to borrow from financial markets in the last decade and away from the low-priced credit offered by institutions like the World Bank.

“As long as these debt issues are not resolved, there is going to be a lot of ‘wait and see’ games going on, and that is not good for the countries, and certainly not good for the creditors as well,” he said.

The World Bank had earlier this year projected that over the next three decades, the Sub-Saharan Africa region would experience the fastest increase in the working-age population of all regions, with a projected net increase of 740 million people by 2050.

It noted that up to 12 million youth will enter the labor market across the region every year in the coming decades, yet only about 3 million new formal wage jobs are currently created each year, thus further creating a dicey situation for the future of the region’s economy.