Sub-Saharan Africa to accelerate to 3.6% in 2024

The economic growth of Sub-Saharan Africa (SSA) is expected to accelerate from 2.8% in 2023 to 3.6% in 2024, closer to the ten-year pre-pandemic (2010-2019), new report suggests, adding that, the growth will average 4.1%.

Data by BMI – a Fitch Solutions company, further suggest that Nigeria will remain the main driver of regional growth, reflecting the country’s position as SSA’s biggest economy, contributing 0.6 percentage points to overall SSA growth, while the East & Central African markets will contribute strongly to overall SSA growth.

The subregion will expand by 4.4% in 2024, up from 3.6% in 2023, mostly driven by regional heavyweights Ethiopia, where reconstruction work is taking place following the end of the Tigray war, and Kenya, which will benefit from lower inflation and improved investor sentiment.

It also showed that the Southern Africa will remain the slowest growing region, with real GDP expanding by just 2.2% in 2024 – though it noted that this is up from 1.4% in 2023.

Kenyan Growth Will Remain Robust In Coming Quarters

In Q223, the Kenyan economy grew by 5.4%, a slow growth that was attributed to tight borrowing conditions and high inflation, after which we expect a recovery in Q423 as inflation cools down.

It is now projected that the Kenyan growth will accelerate to 5.4% in 2024, up from a forecast 5.2% in 2023.

Continued disinflation will be driven by base effects from high inflation in 2023, improvements in food supply, and a slower depreciation of the Kenyan shilling, while lower price pressures will support real household disposable incomes, and subsequently private consumption.

Nigeria

Nigeria’s purchasing managers’ index (PMI) slipped deeper into contractionary territory in November, pointing to a weakening in commercial activity.

Elevated inflation following key economic reforms will tip more households into poverty and keep domestic consumption weak in 2024.

Crude production will grow by 2.4% in 2024 to an average of 1.6mn barrels per day, as security agreements pay off and stronger investment results in a more reliable midstream network.

Combined with a contraction in imports following the anticipated operational start of the Dangote Refinery, this the report suggests will support growth in 2024.

South African Growth to Tick Up, But Remain Below SSA Average

Fitch economists revised its 2023 growth figure to 0.7% – from 0.5% previously – due to a better-than-expected Q323 outturn of a 0.1% q-o-q contraction (in seasonally adjusted expenditure terms).

But in 2024, it now forecasts that the South African economy will expand by 1.7% (revised from 1.9% previously), with its Power team expecting loadshedding to persist in 2024 as a result of limited efforts to reduce breakdowns of power station units. This will constrain business activity and cap growth.

However, falling unemployment and statistical base effects will support household spending and thus overall growth in 2024.

Ghana’s Economy To Enter Recovery Phase In 2024

The Ghanaian economy is projected to expand by 3.7% in 2024, up from 3.0% in 2023 as stronger public expenditure (ahead of the December 2024 elections) will stimulate domestic demand.

However, a corresponding rise in imports (which will weaken net exports) will cap headline economic growth in 2024.