The World Bank has highlighted the limitations posed by economic weaknesses in Sub-Saharan Africa’s largest economies – Nigeria, South Africa, and Angola in its recently released Global Economic Prospects for 2024. The Bretton Wood Institute predicts the global economy is heading for its most challenging performance in three decades.
According to the report, the Sub-Saharan Africa (SSA) region is expected to experience a growth rate of 3.8% in 2024 and 4.1% in 2025, which is attributed to reduced inflation and eased monetary policies. However, the report underscores that the sluggish performance of the region’s major economies, specifically Nigeria, South Africa, and Angola, will drag on overall regional growth.
Excluding the three largest economies, the Sub-Saharan region is anticipated to witness an upturn in growth, projecting 5% in 2024 and 5.3% in 2025, compared to the initial forecasts of 3.8% and 4.1%, respectively.
The report states, “Excluding the three largest SSA economies, growth in the region is expected to accelerate from 3.9% in 2023 to 5% in 2024, and a further 5.3% in 2025. Although waning inflationary pressures should allow for a gradual easing of interest rates, thereby bolstering private consumption and investment during the forecast period, the weaknesses in the region’s three largest economies will limit the pickup in SSA’s growth.”
The World Bank’s projections for Nigeria indicate economic growth of 3.3% in 2024 and 3.7% in 2025. The report acknowledges that cash scarcity and low oil production in the early part of the year negatively impacted the economy in 2023. However, the bank expects inflation to ease in 2024 as new reforms take effect.
For South Africa, facing an energy crisis and transportation bottlenecks that hampered the manufacturing sector in 2023, growth is forecasted at 1.3% and 1.5% in 2024 and 2025, respectively. Nigeria and South Africa collectively represent about 43% of Africa’s $2.06 trillion GDP.
Both economic powerhouses have encountered challenges in recent times. In Nigeria, GDP growth for 2023 fell short of projections, influenced by disruptive currency demonetization policies and ongoing reforms. Despite these setbacks, there was a positive development in annual oil production, rebounding after a significant decline in previous years.
South Africa’s economy grappled with an energy crisis, transportation bottlenecks, and weakened demand amid slow job creation, high prices, and tightened monetary policies in 2023. Unprecedented levels of power outages significantly impeded manufacturing and mining production.
