(Ecofin Agency) - The multilateral financial institution anticipates improved growth prospects in the region, primarily driven by decreasing inflationary pressures and easing financial conditions. After a notable slowdown in 2023 (2.9% growth), Sub-Saharan Africa's economic growth is expected to reach 3.8% in 2024 and 4.1% in 2025, according to the World Bank’s latest Global Economic Prospects released on Tuesday, January 9, 2024.

The document highlights that the projected acceleration in regional growth will result from a reduction in inflationary pressures and relaxed financial conditions. The growth of the three main economies in Sub-Saharan Africa is expected to lag behind the regional average: Nigeria (3.3% this year and 3.7% in 2025), South Africa (1.3% in 2024 and 1.5% in 2025), and Angola (2.8% this year and 3.1% next year).

Although metal exporters are expected to recover from the growth setback in 2023, downward revisions in growth projections, compared to those in June 2023, mainly concern these countries. The persistent slow growth in China's demand likely hampers their activity.

Overall, countries with fewer natural resources are expected to maintain a growth rate higher than the regional average (5.4% in 2024 and 5.7% in 2025). The World Bank also estimates that per capita income in Sub-Saharan Africa should only increase by an average of 1.2% this year and 1.5% in 2025.

In 2025, the per capita GDP of about 30% of the region's economies, with a population of over 250 million people, will not have fully recovered to pre-COVID-19 levels. This indicates that these economies will have lost several years in the progression of per capita income.

The main risks negatively impacting the growth outlook for Sub-Saharan African countries in 2025 include worsening political instability and geopolitical tensions, such as the escalating conflict in the Middle East, disruptions in global trade, increased frequency and intensity of adverse weather events, a more pronounced global economic slowdown than expected, and a higher risk of government defaults.

Furthermore, the World Bank estimates that global growth is expected to be 2.4%, declining for the third consecutive year after a rate of 2.6% in 2023. This is due to increasing geopolitical tensions, slowdown in most major economies, sluggish global trade, and the most restrictive financial conditions in decades.

“As the world nears the midpoint of what was intended to be a transformative decade for development, the global economy is set to rack up a sorry record by the end of 2024 -the slowest half-decade of GDP growth in 30 years,” the institution said.

In 2025, global growth is expected to slightly rebound to 2.7%.