WEF sees economic resilience in sub-Saharan Africa amid global volatility

Founder and executive chairperson of the World Economic Forum, Klaus Schwab, delivers a speech at the World Economic Forum in Davos in January 2024. Picture: Supplied

Founder and executive chairperson of the World Economic Forum, Klaus Schwab, delivers a speech at the World Economic Forum in Davos in January 2024. Picture: Supplied

Published May 30, 2024


The World Economic Forum (WEF) chief economists believe that economic growth in sub-Saharan Africa will remain robust in 2024 in spite of global economic volatility and stubbornly high inflation.

According to the WEF Chief Economists Outlook for May 2024 released yesterday, about seven out of 10 respondents foresee moderate or higher growth in sub-Saharan Africa in 2024, a slight improvement from January.

Earlier this year, the WEF forecast sub-Saharan Africa economic growth to reach 3.4% in 2024 and 3.8% in 2025 after bottoming out at 2.6% in 2023.

However, the WEF chief economists flagged the slow pace of disinflation.

“For sub-Saharan Africa, the expectation of problematic inflation is even more pronounced, with almost half of respondents expecting high or very high inflation, while another 43% foresee moderate inflation in the region,” they said.

“Elsewhere in the world, expectations of lower inflation have solidified somewhat. About two-thirds of chief economists still expect moderate inflation in the US, unchanged since January, whereas there has been an increase (to 22%) in the share of respondents expecting high inflation.

“For Europe, the outlook is broadly unchanged since the last edition, with 57% expecting moderate inflation and a quarter expecting low inflation this year.

“China remains a notable outlier in terms of deflationary risks. About 81% of respondents expect low or very low inflation this year, with the share of those expecting very low inflation almost doubling to 35% since January.”

Economic growth worldwide may have stumbled in recent years, but the outlook for the global economy is improving.

The latest Outlook found that just 17% of chief economists surveyed expect the global economy to weaken in the remainder of 2024, marking a staggering drop of the 56% of respondents who held the same view when the survey was last conducted in January.

Moreover, more than eight in 10 respondents now say they expect the global economy to strengthen or remain unchanged this year.

Indermit Gill, senior vice-president and chief economist at the World Bank, said economic growth has certainly become harder to crank up than it used to be.

As a result, Gill said their research indicated that average global potential GDP growth over the remainder of this decade will decline by roughly a third from the rate that prevailed in the first decade of this century to 2.2% a year.

“Yet several opportunities exist to boost growth. AI certainly holds great promise, but its potential – at least in the near term – will be confined to advanced economies, which have the digital infrastructure, the highly skilled workforces, and the institutional frameworks needed to make the most of the technology.

“For developing economies, however, the biggest opportunity might be in making it easier for women to join the workforce: closing the gender gap would essentially double the global growth rate over the next decade.”

While some of the sharpest near-term risks to the global economy may have eased, uncertainty remained high, and the chief economists highlighted a number of potentially disruptive factors.

Nearly all respondents (97%) expected international geopolitics to cause global economic volatility throughout 2024, up from 90% in September 2023.

“The geopolitical context is changing rapidly, and its full implications for global competition, production and value chains are yet to be fully understood. We’re seeing the emergence of trade disruptions, calls for strategic autonomy, proliferation of subsidies and rising tariffs, as well as new paths for the triangulation of trade flows,” said Debora Revoltella, chief economist for European Investment Bank.

“European firms are particularly affected. What is clear is that Europe is more dependent on globalisation than the US. This calls from deep understanding of where strategic dependencies are and a reflection on how to build long-lasting resilience.”