The United Nations (UN) Trade and Development department predicts that African economies will accelerate their economic growth, from a 2.9 per cent expansion of GDP in 2024 to 3.6 per cent this year.
‘In Africa, growth is expected to rise to 3.6 per cent this year; the economic outlook for the three largest economies, which together account for almost half of aggregate economic output, shows mixed traits of recovery and challenges,’ write the analysts from UN Trade and Development (formerly UNCTAD) in their report on the growth of the world economy.
Globally, the forecast is for a slowdown to 2.3 per cent, compared to 2.8 per cent in 2024. Looking only at sub-Saharan Africa, the UN predicts an acceleration, from 4 per cent in 2024 to 4.3 per cent this year, but still insufficient to improve the quality of life of Africans in this region, which includes the majority of Lusophone countries.
‘In general, as the world faces cascading crises, Africa remains at the forefront of exposure and the moderate pace of economic expansion observed across the continent, with the exception of a few positive points, remains insufficient to create a sufficient number of good jobs, especially for its young people, and, more generally, to achieve significant progress towards the Sustainable Development Goals,’ the report goes on to say.
In the most recent report specifically on Africa, published by the United Nations Economic Commission for Africa (UNECA) at the end of March, analysts wrote that one of the region’s main problems was the high level of public debt, which took away space for investment in the infrastructure that allows economies to develop.
Public debt in Africa is expected to fall from 62.5 per cent last year to 62.1 per cent this year, after reaching 67.3 per cent in 2023, but this drop is not enough to eliminate the debt crisis that many countries in the region are facing, says the UN.
‘Despite the slight drop, debt levels are still high and are comparable to the figures recorded before the debt relief initiatives in the mid-2000s,’ reads the Economic Report on Africa (REA), released following the conference of African finance ministers, which took place in March in the Ethiopian capital, Addis Ababa.
In the document, the UN experts write that fiscal policy is returning to normal, but warn of ‘significant debt payments this year, with the current financial challenges forcing countries to reduce essential public spending and direct resources to debt servicing’, which perpetuates the cycle of indebtedness.
Debt servicing costs are expected to have reached 163 billion dollars, 12 per cent more than the previous year, says UNECA, pointing out that although 2024 should have marked the year of the highest payments, ‘the figures will remain well above pre-covid-19 pandemic levels in the short and medium term’.
The institution also mentions ‘vulnerabilities to remain high, demonstrated by high interest rates, volatile public finances, accumulation of late payments and a prolonged impact of external shocks’.
The North African region leads the index of the highest debt-to-GDP ratios, with 76 per cent, followed by Southern Africa, which includes Angola and Mozambique, with 70.7 per cent, with East Africa being the least indebted region, with a public debt of 39.2 per cent of GDP.
Lusa
