The International Monetary Fund (IMF) has raised its economic growth forecast for sub-Saharan Africa to the highest level since 2021.
However, the global lender cautioned that elevated uncertainties, including social unrest, could impact stability, Bloomberg reported.
The IMF now projects the region’s growth to reach 4.2% in 2025, up from its April forecast of 4%. However, in its Regional Economic Outlook released Friday, the IMF lowered its 2024 projection to 3.6%, noting that resource-dependent nations are expected to grow at half the pace of those with diversified economies.
There has been a wave of protests across sub-Saharan Africa, especially in countries like Kenya, Nigeria, and Ghana, where governments are grappling with financial pressures. In response, many governments have implemented tax hikes and spending cuts, fueling discontent as citizens face steep increases in the cost of living.
“People’s resilience is being tested,” said Abebe Selassie, director at the IMF’s Africa department. “I can hardly think of another part of the world whose resilience is being tested as my region.”
The IMF highlighted that while economic imbalances in sub-Saharan Africa have started to narrow, significant challenges remain.
For example, inflation remains in double digits in nearly a third of the region, with the cost of basic goods and services soaring in many countries.
Additionally, rising debt-service costs are increasingly squeezing out funds that could otherwise be directed toward development.
The short-term impacts of macroeconomic adjustments are causing significant hardships in many countries, the fund said in the report. The resulting social frustration and political pressures make it increasingly challenging to implement reforms.
The report cautioned that inequality and social exclusion are driving forces behind this unrest, noting that perceptions of exclusion are more pronounced in Africa than in any other region.
Youth unemployment is a particularly urgent issue, with over one in four young people regionally out of work or school, representing a major source of discontent.
