In2024, Africa’s overall growth is forecasted at 4.0%, a notable increase from 3.3% in 2023, positioning it as the second-highest globally, trailing only Asia (4.8%). East Africa takes centre stage in this growth narrative, exhibiting consistently higher growth rates than the rest of the continent. Rwanda, Tanzania, Uganda, and Kenya are identified as key drivers, collectively contributing significantly to the region’s economic resurgence.
These forecasts come from economic analysis and data-driven insights provider, Stears, which this week unveiled its 2024 African Outlook Report, delivering insights into the continent’s economic landscape. The report sheds light on the diverse growth trajectories across Africa, with East Africa emerging as a regional powerhouse.
“East Africa’s growth is propelled by dynamic sectors such as natural resources, transportation, tourism, and agriculture. Significantly, there is potential for further acceleration due to increased investment from Gulf countries. These developments are shaping East Africa into a model region for economic resilience and diversification,” says Fadekemi Abiru, head of insights at Stears. Notably, South Africa, Egypt, and Nigeria – considered economic giants – are poised for growth rates below the regional average, emphasising the importance of recognising and navigating the diverse economic landscapes that exist within the continent.
Stears further delves into key African countries, specifically Kenya and Nigeria, projecting persisting economic challenges for both nations. The macroeconomic analysis for Kenya anticipates persistent currency depreciation and inflationary pressures. The 2024 Africa Outlook Report highlights that inflation averaged 7.8% in 2023, with a nuanced forecast ranging between 6% and 7.4% for 2024. This aligns with the Central Bank of Kenya’s (CBK) target range of 5±2.5%, reflecting a global trend targeting enhanced price stability.
Notably, South Africa, Egypt, and Nigeria – considered economic giants – are poised for growth rates below the regional average, emphasising the importance of recognising and navigating the diverse economic landscapes that exist within the continent.
Dumebi Oluwole, senior economist at Stears, underscores the significance of inflation as a barometer of economic health and advocates for the urgent need to address the persistent challenge of currency depreciation. The report reveals a closer alignment of the Kenyan Shilling (KES) to its fair value, shedding light on the delicate balance between inflation dynamics and investor attractiveness. Nevertheless, Kenya’s GDP per capita stands 30% above the Sub-Saharan Africa average, signalling increased consumer spending and positioning the country as a significant market. The report, however, highlights the potential for further GDP per capita growth, primarily through improved job creation in high-value sectors like manufacturing and services.
Simultaneously, the 2024 African Outlook Report delves into Nigeria’s macroeconomic landscape, revealing a formidable challenge in the form of a high headline inflation rate, currently at 28.2%. Stears projects an average annual inflation rate ranging from 27.59% to 31.85% for 2024, necessitating proactive measures for economic stability. Oluwole explains, “The elimination of petrol subsidies has significantly heightened the cost of living for consumers, leading to an overall uptick in inflation. Coupled with the devaluation of the naira, this has precipitated higher exchange rates, complicating the economic landscape for both consumers and businesses.”
Stears emphasises the need for strategic interventions to enhance liquidity and stabilise the exchange rate, highlighting the importance of collaborative initiatives between the government, regulatory bodies, and the private sector for sustained economic growth.
MORE: For more detailed information, download the free executive summary.
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