Several countries, including Côte d’Ivoire, Benin, and Kenya, have successfully issued Eurobonds, marking a return to international capital markets after a two-year hiatus. Moreover, public debt ratios are showing signs of stability, and capital flows are returning to the region.
The IMF forecasts economic growth of 3.8% in 2024, following 3.4% in 2023. This recovery is expected to continue in 2025 with projected growth of 4.0%. The median inflation rate has been halved, dropping from around 10% in November 2022 to 6% in February 2024.
However, despite the improvements, sub-Saharan African nations continue to struggle with securing funding. High borrowing costs and refinancing risks are compounded by insufficient domestic revenue generation. These financial limitations force countries to cut essential spending and prioritize debt servicing, potentially hindering future growth.
Traditional sources of financing, such as official development assistance, are declining. Low-income countries in the region face a projected funding gap exceeding $70 billion annually for the next four years.
The economic outlook remains susceptible to external factors like political instability, climate change, and global geopolitical tensions.
The IMF emphasizes the need for increased engagement from the international community to assist the region. Countries within the region must prioritize improving revenue collection without disproportionately affecting citizens, maintaining monetary policies focused on controlling inflation, and implementing structural reforms to diversify their economies and funding sources.
The IMF acknowledges sub-Saharan Africa’s resilience and its determination for growth. Collaborative efforts between the international community and regional governments are crucial to overcome these challenges and build a more prosperous future for the continent.
AC/fss/abj/APA