Economic growth set to accelerate slowly

With some notable exceptions, economic growth in the sub-Saharan region as a whole is expected to increase. In its October 2024 outlook, the International Monetary Fund predicts there will be 3.6% growth in 2024, unchanged from 2023, “with a modest increase to 4.2% in 2025 – insufficient to significantly reduce poverty or address development challenges”.The World Bank is a little more conservative at 3% growth in 2024, and 4% in 2025.There is potential for much better performance, according to the World Bank’s October “Africa Pulse” report.Sudan’s civil war has resulted in a 0.4 percentage point downgrade in prospects compared to the bank’s April forecast.Excluding Sudan, the region is expected to grow at 3.5% in 2024.Logistics companies can expect increased demand for the transport of consumer goods as well as project cargo.The bank sees economic growth being driven by an increase in private consumption as declining inf lation boosts the purchasing power of African households.Expectations of interest rate cuts are improving business sentiment and appetite for investment.However, the growth rate is not high enough to create sufficient sustainable jobs.The number of poor people in the region increased from 448 million in 2022 to 464m in 2024.Companies doing business in Africa have to factor in a number of risks."Sub-Saharan African countries are navigating a complex economic landscape marked by both progress and persistent vulnerabilities," said Abebe Aemro Selassie, director of the IMF's African Department. “While many of the region’s countries are among the world’s fastest-growing economies, resource-intensive countries — particularly oil exporters — continue to struggle with lower growth rates.”The World Bank focuses on security: “Rising violent conf lict and suppression are weighing on business sentiment, delaying private sector investment decisions and rendering commitment to business contracts such as hiring and purchasing agreements more difficult. “The high cost of living, corruption, and, more broadly, weak governance have triggered protests and palpable anger among the youth in Kenya, Nigeria, and Uganda — unrest that could spread throughout the region,” it adds.The report says investments in energy, transport networks, and telecommunications can accelerate inclusive growth by removing productivity constraints, reducing the cost of delivered goods, facilitating the movement of people and products, and increasing competitiveness. While Africa has the natural resources to become an economic powerhouse, it also needs people power. “Investments in people are also key to boosting productivity and ensuring a prosperous future in sub-Saharan Africa,” says the World Bank.“Smarter, bigger investment in education is fundamental to improving the region’s human capital development.” ER