IMF releases Regional Economic Statistics for Sub-Saharan Africa | Full Document
International Monetary Fund (IMF)
The International Monetary Fund (IMF) has released the document on the Regional Economic Statistics for Sub-Saharan Africa
From the publication’s Executive Summary, IMF stated that
“After four turbulent years, sub-Saharan Africa appears finally on the mend. With the easing of global financial conditions,
Côte d’Ivoire, Benin, and Kenya issued Eurobonds earlier this year, ending a two-year hiatus from international markets for the region. Public debt ratios have broadly stabilized, and some capital flows are making a tentative comeback.
“The overall regional outlook is gradually improving, with economic activity tepidly picking up. Growth will rise from
3.4 percent in 2023 to 3.8 percent in 2024, with nearly two thirds of countries anticipating higher growth. Economic
recovery is expected to continue beyond this year, with growth projected to reach 4.0 percent in 2025.
“In parallel, median inflation has almost halved from nearly 10 percent in November 2022 to about 6 percent in February 2024.
“However, not all is rosy, and the funding squeeze continues. The region’s governments continue to grapple with
financing shortages, high borrowing costs, and rollover risks amid persistently low domestic resource mobilization.
“Significant debt repayments are looming this year and next. The financing challenges are forcing countries to cut
essential public spending and redirect development funds to debt service, thereby endangering growth prospects for future generations.
“The funding squeeze partly reflects a reduction in the region’s traditional funding sources, particularly Official
Development Assistance. Gross external financing needs for low-income countries in sub-Saharan Africa are estimated to exceed $70 billion annually (6 percent of GDP) over the next four years.
“As concessional sources have become scarcer, governments are seeking alternative financing options, which are typically associated with higher charges, less transparency, and shorter maturities.
“The cost of borrowing—both domestic and external—has increased and continues to be elevated for many. In 2023, government interest payments took up 12 percent of its revenues (excluding grants) for the median sub-Saharan African country, more than doubling from a decade ago. The private sector has also started to feel the pinch from higher interest rates.
“Risks to the outlook remain tilted to the downside. The region continues to be more vulnerable to global shocks,
particularly from weaker external demand and elevated geopolitical risks. Moreover, countries in sub-Saharan Africa face rising political instability and frequent climate shocks. The region faces a critical year with 18 national elections in 2024.
“Similarly, climate shocks are becoming more frequent and widespread, including droughts of unparalleled severity.”
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SOURCE: Coverghana.com.gh
