AfDB upgrades West Africa’s 2024 economic growth forecast from 4% to 4.2%

The African Development Bank (AfDB) has reviewed its 2024 economic growth forecast for Nigeria and other West African countries to 4.2 percent.

The forecast is an upgrade from the 4 percent initially projected in February.

The projections are contained in the lender’s latest ‘African Economic Outlook’ report for 2024, published on Thursday.

The bank also retained its 2025 economic growth rate projection at 4.4 percent.

The report also showed that Africa’s economic growth rate was downwardly reviewed from 3.8 percent to 3.7 percent in 2024; while the projection for 2025 was raised from 4.2 percent to 4.3 percent.

“Growth is projected to pick up in West Africa, rising from an estimated 3.6 percent in 2023 to 4.2 percent in 2024 and consolidating at 4.4 percent the following year,” the report reads.

“This is an upgrade of 0.3 percentage points for 2024 over the January Macro Economic Outlook (MEO) projections, reflecting stronger growth upgrades in the region’s large economies (Côte d’Ivoire, Ghana, Nigeria, and Senegal).”

Speaking on the projections, Kevin Urama, vice-president and chief economist at AfDB, said African economies have continued to remain resilient amid multiple shocks, as their average growth was projected to stabilise at 4 percent in 2024 and 2025, against 3.1 percent estimated in 2023.

He said the average real gross domestic product (GDP) growth was estimated to have slowed from 4.1 percent in 2022 to 3.1 percent in 2023.

Urama attributed the decline to various factors, including persistent high food and energy prices, reflecting the sustained impacts of Russia’s invasion of Ukraine.

He said other factors include climate change, extreme weather events that affect agricultural productivity and power generation, and pockets of political instability and conflict in some African countries.

Urama also said the real GDP growth rate is estimated to rise to 3.7 percent in 2024 and 4.3 percent in 2025 — exceeding the 4.1 percent in 2022.

“This is as most of the effects of the above factors weighing on growth in 2023 fades away,” he said.

“The projected rebound in Africa’s average growth will be led by East Africa (up by 3.4 percentage points) and Southern Africa and West Africa (each rising by 0.6 percentage points).

“Critically, 40 countries will post higher growth in 2024 relative to 2023; 17 economies are projected to grow by more than five per cent in 2024 and may rise to 25 in 2025.

“This is remarkable, and Africa will retain its 2023 ranking as the second fastest growing region after Asia in 2024-25 with projected GDP growth exceeding the global average of 3.2 per cent in 2024.”

Urama also said the average growth in oil-exporting countries is expected to decline from an estimated 3.7 percent in 2023 to 3.5 percent in 2024 but could pick up to 4 percent in 2025.