Sub-Saharan Africa’s economy is on track to grow by 3% in 2024, according to the World Bank Group’s Africa’s Pulse report. However, this growth has not been strong enough to significantly reduce extreme poverty.
Real per capita income in the region is still 2% below 2019 levels, highlighting the gap between economic recovery and poverty reduction efforts.
While economic growth has resumed, the number of people living in extreme poverty—those surviving on less than $2.15 a day—has risen from 448 million in 2022 to 464 million in 2024. Although the extreme poverty rate has dropped slightly to 36.5%, the number of poor individuals continues to increase, showcasing the need for more targeted and effective policies.
The report emphasizes that private consumption and investment have been driving economic recovery, boosted by falling inflation, which has helped improve purchasing power for many African households. Inflation is forecasted to decrease from 7.1% in 2023 to 4.8% in 2024, thanks to stabilizing commodity prices, better supply chain management, and tighter fiscal policies.
Nearly 70% of countries in Sub-Saharan Africa are expected to experience lower inflation next year, with 80% projected to follow suit by 2025.
However, the inflation picture across the region is uneven. While most countries have experienced a steady drop in inflation, around 30% continue to face high inflation rates. For these nations, inflation either peaked or remains stubbornly high, and their currencies have weakened since mid-2023, creating economic challenges that require swift and decisive policy interventions.
Some central banks in Africa have already begun lowering interest rates as inflation eases. But for countries where inflation remains high, monetary policy tightening is expected to continue in order to anchor inflation expectations and stabilize prices.
Debt management remains another critical issue, with many African countries grappling with high debt service costs. Governments are being urged to adopt more transparent fiscal policies to improve investor confidence and reduce borrowing costs.
While the region’s economic recovery may ease some fiscal pressure, many countries will still need to implement fiscal consolidation measures to keep debt levels sustainable.
