Emmanuel OchayiSub-Saharan Africa, grappling with a 52.32% surge in external debt to $863.38bn by 2024, is poised for a pivotal year, as Financial Derivatives’ report reveals.
Despite 2023’s challenges – coups, debt, and inflation causing a dip in GDP to 2.9%, optimism surrounds a projected 3.8% growth in 2024, surpassing advanced economies.
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Addressing macroeconomic hurdles is imperative, warns the report, emphasizing proactive policymaking to restore pre-pandemic growth levels. Notably, the burden of pre-COVID debt accumulations haunts SSA, with Kenya’s Eurobond yields soaring to 15.65%, attributing this to global interest rate hikes.
“As SSA’s external debt escalates, returning to pre-pandemic growth levels demands proactive policymaking,” urges the report. Specific risks loom from excessive debt, political unrest, and military conflicts, especially in the Sahel.
2024, dubbed the largest global election year, features over 16 African nations, including South Africa, Namibia, and Ghana, conducting elections. The report foresees nations prioritizing intra-African trade, revenue diversification, and infrastructure, shielding them from China’s slowdown.
“The IMF forecasts a 4% growth for SSA in 2024,” notes the report, citing a rebounding global economy, increased investments in oil, gas, and renewables, and high prices for Africa’s resources. Notably, the service sector, especially in Uganda and Rwanda, is anticipated to drive growth, reaching 6% and 7.5%, respectively.
As SSA confronts economic complexities, the 2024 landscape, marked by elections and economic shifts, underscores the region’s resilience amid challenges. The trajectory hinges on adept policymaking, debt management, and growth initiatives.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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