The study of economic projections for Africa 2024 carried out by the “Analysis and Foresight of the Global Latin Africa Foundation” department indicates that the economy of sub-Saharan Africa will have a significant scale of growth despite externalities and global crises.
1. This FGAL report was carried out in the offices of FGAL Morocco and aims to observe the consumption, investment and economic growth behaviors of the region in comparative tables. Also highlighting the impact of the increase in population in the region, and its accelerated expansion process; estimating that it will very soon reach 1,260 million inhabitants; half of whom will be in an age range of less than 25 years in the next fifteen years.
2. Currently, the efforts of these nations from a comparative perspective are aimed at improving human development indicators and adjustments to their extractive policies, exploitation of large mining and exploitation of natural resources based on the imposition of standards, legislation and international agreements that have guided productive regulations that are friendly to sustainability and the environment.
3. There is a clear reading of models and actions to promote economic diversification initiatives, promotion of the free market and competition towards innovation; under the impulse and support of entrepreneurship and research; actions fueled on many occasions by international cooperation; both triangular and bilateral. These axes are an important incentive for this purpose, as they allow the execution of promotion actions that are helping to generate inclusive growth and stages of progress in order to add strategies in the fight against poverty.
4. It is important to note that in a macro analysis, the continent is moving towards the consolidation of a free trade zone, bringing together an estimated market of 1.2 billion people, and following a trajectory towards cooperation and economic freedom, completely new aspects. , which take advantage of the potential of the wealth and resources available.
5. Another important aspect recorded in recent years and currently on the rise is the development of various testing and economic analysis laboratories in university classrooms and think tanks in the subregion, where many university centers also seek accreditation of their research processes, teaching and extension in accordance with international standards.
6. In the case of CEMAC, it is estimated that the promotion of public-private alliances will be on the rise, as will the need for standardization of companies, state and private corporations under the application of ISO 9001, 14001 and 37001 standards. ; this, in order not to reduce competitiveness and ensure quality and conformity of its products and services.
7. In this line of work, Cameroon and Gabon have made progress in certain regulatory aspects, including the exhaustive development of national standards, support for implementation and certification processes, Equatorial Guinea even takes an important leap in considering looking at the OECD and its indicators. , as announced by its ambassador in Paris.
8. Currently in CEMAC, the determination of prices is governed by the laws of the market in all associated countries, with the exception of certain products and services, whose prices are administered, or approved by administrative decision. This practice does not cover the same range of products in all countries, for example:
Gabon, with 166 products, has the largest basket of approved products, followed by Equatorial Guinea (68), the Central African Republic (30), Cameroon (22), Congo (16) and Chad (7).
9. Everything indicates that there is a high possibility of banking turbulence in 2024 at a global level, which could impact the CEMAC and be accompanied by adjustments in interest rates and the recommendation to apply more restrictive monetary policies.
10. Still, growth estimates for Africa will look better than the global average; particularly by the oil, natural gas, timber, agribusiness and open ground mining industries, pointing to a higher growth indicator than previous years despite financial disturbances in emerging markets and developing economies.
11. Projections indicate that African economies will generally be able to consolidate their participation in important global supply chains, leveraging their vast resources of materials needed for high-tech sectors and their own consumer markets.
12. Africa’s gross domestic product (GDP) could grow by around 3.5% with an average ceiling of 4%
this 2024 despite multiple challenges and economic externalities, aiming at a rate slightly higher than previously recorded and notably above the global growth average.
13. In any event, Africa is a very important factor in the development of the global economy, and along these lines, it is evident that “to have comprehensive and prosperous development, a prosperous Africa is required. Prosperous in terms of investment, economic growth and productive promotion of competitiveness.” It is obvious, then, that Africa is a strategic continent; and that better and greater economic progress for its countries is also greater resilience for the world economy.
14. It is evident then that the development of industry and the phased use of its natural resources will provide an opportunity to improve the fiscal and debt sustainability of African countries, some with better management than others regarding fiscal order and inflationary control.
15. For their part, natural resources (oil, gas and minerals) offer a huge opportunity for the economies of sub-Saharan Africa during the transition towards low-carbon energy production, and its extractive and preferably strategic industry still has potential exploration and exploitation.
16. In general, the short and medium-term growth prospects of the continent and particularly of the sub-Saharan region will be subject to significant fluctuations, including the slowdown of the world economy, and the accumulation of inflation indicators in yellow; permeating economic expectations and projections due to the tightening of financial conditions, but even under these threats there is a significant margin for upside.
17. Finally, it is important to highlight and reiterate that Africa currently holds a never-before-seen strategic position to strengthen global supply chains, namely:
First, due to the great diversification efforts; second, why some countries on the continent are already committed to the development of emerging industries, promoting economic growth and job creation for millions of people; third, due to the abundance of certain critical minerals and metals, such as aluminum, cobalt, copper, lithium and manganese, all vital components in renewable and technology-intensive industries; and fourth, due to their extractive proximity and manufacturing possibilities within the region. This, taking into account that the international upheavals caused by trade turmoil and geopolitical events, which today force manufacturers to diversify their production locations to maintain the trade chain.
18. Particularly well seen are the projections in nations such as Libya (6.9%), Senegal (7.1%), Niger (7.3%), Democratic Republic of the Congo (6.7%), Rwanda ( 6.7%) and Ivory Coast (6.5%). Likewise, an increase in GDP is projected for Africa as a whole at an average rate of 3.5%, even with a subtle escalation to 4.2% by the end of 2024 depending on the driving forces of countries such as Nigeria and South Africa. This boost could come, according to risk analysis houses, from the Nigerian economy; the largest on the entire continent – which surpasses South Africa in terms of GDP and population, is a phenomenon to be observed.
19. In general terms, it is recommended to restore the soundness of the financial system throughout the region in order to limit fiscal and systemic risks, together with the promotion of growth led by the private sector and public-private alliances for the oil industry sector, and in special cases, timely adjustment policies are recommended, particularly in countries already hit by inflation, an intra-African trade scheme should be promoted; especially manufacturing products and food, in order to protect economies from the volatility of raw material prices.
20. The analysis presented here also considers it appropriate to warn about externalities such as climate change and the effects that this entails for global and regional risks, both current and future; which include the rapid increase in food and energy prices, aspects that impact policies to tighten international financial conditions, added to an associated rapid increase in debt service costs.
Khadija Ben Lahcen
Rabat, December 2023
Source: Global Foundation Press Latin Africa Morocco
On behalf of the Latin Africa Global Foundation, we thank AL-KHALIFA BUSINESS SCHOOL for disseminating this important academic article.