Africa in 2024
This year will bring more debt distress, respectable growth — especially in Eastern Africa, a number of pivotal elections, and sticky of conflicts and political instability in several countries.
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I: Tough economic times ahead
This year will be a make or break for several of Africa’s leading economies. Some will exploit the window of opportunity created by the current debt crisis to make lasting positive reforms and strengthen their fiscal capacity. Many more will miss the opportunity and instead implement the minimum reforms needed to keep financial support from the IMF, the World Bank, and other donors flowing. Inflation will ease across the board in 2024, but the lasting effects of the hit on households’ purchasing power will endure. Currency depreciations in countries dependent on food imports will exacerbate the squeeze on household incomes.
The projected 4.1% increase in regional GDP, is respectable, but will barely make a dent on per capita incomes. Only Sudan and Equatorial Guinea will see their economies contract. East Africa will be the continent’s growth engine in 2024.
Growth will mostly come from natural resource sectors (especially hydrocarbons), transportation and logistics (including infrastructure investments), resurgent tourism in Eastern and Southern Africa, and agriculture. In addition, this might be the year that Gulf cash comes to the rescue in a few of the region’s economies (e.g., Kenya, Ethiopia, Rwanda, and Tanzania). China’s slowdown, subdued global commodity prices, policy-related barriers to investment and trade, and political risk will continue to weigh down many regional economies.
While Africa will host 12 of the world’s 20 fastest growing economies in 2024, much of the growth will be from a low base (made even lower by the COVID shock and its aftermath) and will barely make a dent on poverty rates in the face of rapid population growth. In addition, several countries’ growth will come from investments in hydrocarbons and other natural resources that create very few jobs and have limited multiplier effects on the wider economy.
Labor productivity in the wider region has stagnated for nearly two decades, and will likely continue to decline due to the low prospects of mass job creation in manufacturing or high value addition services.
High interest rates will continue to lock African governments from global credit markets and unable to rollover their debt. Thus the ongoing fiscal squeeze will persist, with African governments forced to intensify taxation, reduce spending on essential public goods and services, continue to crowd out private lending by over-borrowing domestically, and/or seek concessional loans from multilateral lenders that come with strings attached. Ideally, multilateral financing ought to force African governments to rationalize their public finance management (PFM) systems (something the Eurobond market clearly failed to do). However, the evidence from countries under ongoing IMF programs is not encouraging. Not even the threat of default (or actual default) appears to be able to force much-needed reforms to PFM systems in the region.
Overall, I don’t expect this year’s economic reforms to yield take-off conditions in the region’s low-income economies — perhaps with the exception of Rwanda and Tanzania. The problem, of course, is that the economic reform discourse remains bifurcated. The multilaterals preach apolitical technical fixes and haven’t figured out how to anchor specific reforms in domestic political economies and institutional processes (is it really that hard to hire competent people to do this?) It’s a no-brainer that when it comes to the politics of reform implementation, African governments pick and choose the bits that are politically feasible. They are also very good at arbitraging the different constraints imposed by multilaterals and their domestic institutions and politics. Everyone would be better off if the multilaterals took domestic institutions and political feasibility seriously.
If this crisis isn’t going to force an honest accounting of African countries’ borrowing, spending, and debt management, what will?
So far Ghana and Zambia (both are in the midst of lengthy post-default restructuring processes) have revealed how hard debt restructuring negotiations are going to be moving forward. Ghana’s election this year will further complicate its domestic politics of fiscal reforms and negotiations with creditors that continue to drag on. It is almost certain that the incumbent party, NPP, will lose to the NDC. Zambia’s relatively more predictable politics haven’t been a boon either. Its own negotiations continue to drag on without a clear resolution in sight.
Ethiopia, Africa’s second most populous country, defaulted in December 2023. It owes about $28 to foreign creditors — $15.3b to multilateral lenders and 7.7b to foreign governments (including $5.2b to China) and $5.2b to private creditors. The federal government will have to navigate its debt restructuring process while also dealing with ongoing conflicts across the country in a geopolitically volatile region. Output is projected to increase by 6% in 2024 — with transportation and logistics and horticulture being the bright spots.
In the main, Ethiopia continues to be held back by its unfinished business of nation-building and perennial bad luck of drawing very low-quality leadership. The war-making skills that most of its leaders have — many of them being alums of the anti-Derg wars and subsequent “pacification” efforts — are not suited for peacemaking and peacetime economic management. Ethiopian elites (and quite frankly, many academics and the wider Ethiopianist commentariat) can’t seem to be able to move past seeing the country through an identity-based conflict prism.
Overall, African states’ debt crises and poor PFM practices are symptomatic of a lack of policy autonomy/ownership. A common delusion is that that the region has good policies, but implementation is the problem. In reality, implementation failures reflect poor policies borne of very low domestic policymaking capacity. Too many governments in the region merely act as implementation arms of multilaterals, foreign donors, philanthropies, and other external actors. This is the tragedy that defines the region’s social sectors — from education, to health, to social protection — where the self-described experts are more likely to parrot the SDGs, “global best practices,” and their favorite workshop destinations than exhibit a reality-based understanding of what needs to be done to improve service delivery.
And even where domestic initiative is more prominent — like in infrastructure investments — short-termist concerns often dominate long-term thinking, even if one ignores standard infrastructure-related political costs of doing business (I plan to post more on the politics of public finance management in the region this year).
II: An electoral jamboree year
About a dozen countries will hold elections this year. The ones I shall be following closely include Botswana (latest by October), Ghana (December), Mozambique (October), Namibia (latest by November), Senegal (February), and South Africa (latest by August). Voters in Chad, Comoros, Cabo Verde, Guinea-Bissau, Mauritania, Mauritius, Rwanda, Somaliland, and South Sudan will also go to the polls this year.
The most interesting thing about this year’s election in Botswana is that the BDP will be facing its stiffest test yet. According to Afrobarometer’s latest survey (2022), the opposition umbrella coalition is running about 7 percentage points ahead of the BDP. In addition, President Mokgweetsi Masisi has a 68.3% disapproval rating. Masisi’s problems are compounded by the fact that former President Ian Khama — who is in self-imposed exile in South Africa — will be campaigning against his father’s party.
Ghana will most likely see former president John Mahama return to power as the NDC candidate. Retiring President Nana Akufo-Addo’s presidency has been an unmitigated disappointment that ignominiously ended in a default and an attendant economic crisis that has dimmed the NPP’s prospects. The most recent Afrobarometer Survey scores his approval rating at 28.8%. Mahama’s entire term will likely be consumed by the economic cleanup job he will inherit from Akufo-Addo. The possibility of any bold new developmentalist policies will hinge on the prices of gold and cocoa.
In Mozambique the retiring president Filipe Nyusi will likely try to impose Carlos Ismael Correia, his preferred successor, on FRELIMO. However, despite his high approval ratings (62.3% according to the last available survey), he’s likely to face opposition from the conservative wing of the party led by former President Armando Guebuza. Nyusi’s anti-corruption campaign — especially over the “tuna bonds” scandal — did not spare the former president’s family, so there are scores to settle. Nyusi’s personalist style of rule, together with the demise of RENAMO as a political force, have led to the sidelining of FRELIMO party organs throughout its tenure. Therefore, this year’s election provides a chance to rejuvenate the party ahead of the country’s anticipated gas bonanza. It’s unlikely that the emerging divisions will precipitate a major intra-elite split and defections ahead of the election. There’s enough to share within the party. Plus, should he emerge as the candidate, Correia is a much better politician than Nyusi and might be able to smooth things over across the rival party factions.
The party might also choose a compromise candidate. However, given FRELIMO’s electoral strength (it dominated last years’s local elections — through fair and unfair means), there’s no imperative for a reformist party candidate.
Namibia stands to elect Netumbo Nandi-Ndaitwah as its first female president. President Hage Geingob is retiring with high approval ratings, and the SWAPO candidate is all but guaranteed to win the presidency. However, SWAPO will likely lose its legislative majority. Namibia will clock a GDP growth of between 2.7-3%, well below what is needed for noticeable improvements in human welfare. SWAPO has seen a steady dip in its support over the years and lost several important local authority elections in 2020. Last year only 35.7% of respondents indicated a willingness to vote for SWAPO.
In Senegal, incumbent Macky Sall avoided the third-termist temptation. His coalition’s candidate will struggle to achieve a clean victory in the presidential election, despite Senegal being projected to be the fastest growing African economy this year (at 10%) due to hydrocarbon investments. However, the government’s willingness to put a thumb on the scale, together with a split opposition vote (especially if Ousmane Sonko is barred from running) might be enough to produce an incumbent coalition victory.
South Africa’s ANC and President Cyril Ramaphosa will retain power, but most likely as part of a coalition government. The ANC dipped below 50% of the vote share in 2021’s municipal elections and will be forced to form coalitions at the national level and in at least two provinces with smaller opposition parties. This turn of events might focus minds within the party to push for much-needed economic reforms — especially in sectors such aa energy, transportation and logistics, and education. Or it might create even worse gridlock that will reinforce South Africa’s decades-long malaise.
III: Elite political instability and Conflict
In 2024 the region will continue paying the price for weak state capacity and arbitrary rule. Endemic insecurity and political instability will plague states in Central Africa, the wider Horn, and the Sahel. The internationalization of the various conflicts will make them intractable, especially since “the international community” will remain distracted by more pressing (from their perspective) issues elsewhere. European states, in particular, will primarily focus on stopping the flow of migrants, countering Russian influence in the region, and preventing jihadist insurgents from harming European interests. The pursuit of lasting peaceful settlements in the conflict-affected states will be secondary to these objectives.
I do not expect any “coup contagion” in the region beyond the usual suspects — weak states with coup histories and/or whose militaries are battling serious insurgencies.
Conflicts in Sudan, South Sudan, Mali, Burkina Faso, Niger, Chad, CAR, and the DRC are likely to worsen. Burundi, Ethiopia, Nigeria, Cameroon, and Somalia are likely to stay stable (albeit still at high cost to the impacted civilians). With help from Rwanda, Mozambique is most likely going to turn the corner this year in the battle against insurgents in Cabo Delgado. The government killed the leader of the insurgency last August and has been able to regain control over 90% of territory once controlled by insurgents.
IV: Star performer of 2024
The country I am most excited about in 2024 is Tanzania. CCM, the ruling party, enjoys a 77% approval rating. While some of this is due to (at times violent) oppression of opposition parties, there’s no denying that Nyerere’s party enjoys broad-based legitimacy. President Samia Suluhu Hassan appears to have finally stamped her authority on CCM (with some help from the Jakaya Kikwete wing of the party). The economy is projected to grow by about 6% in 2024. And Tanzania continues to consolidate its position as the future gateway into East and Central Africa with important infrastructure plays — including ports, an expanded rail line to the northwest, and planned Chinese collaboration in the running of the Tazara line into Zambia (which should increase efficiency).
Agriculture, mining, construction, and services (especially tourism) will be the main engines of growth in the medium term.
Human capital development is Tanzania’s weakest link. The Tanzanian education system (the subject of the book I am currently working on) continues to be hobbled by under-investment at all levels and a confused language policy. There is an urgent need to streamline the language policy, in addition to investments in context-relevant research at the tertiary level.
Happy New Year!
Yes, their are all these people registered to vote in South Africa. but how many of them are going to actually vote? the turn out at our last municipal elections was very low.
People have lost so much faith in the anc, and righty so. if they don't want to vote for them, then nobody else should get their vote. People see all the corruption going on with them, and think that all the other parties are the same....
This year will be about coalitions no doubt.
Key thing is for the DA is to get as much of the vote as possible. how they do that is another question in itself. they haven't done very well with the coalitions that they have had these past few years.
Another point as I sure you are well aware of is that we have too many political parties. the only thing the the majority of them care about is getting a seat in parliament and nothing else. just watch our state of the nation address next month. they spend more time shouting at each other than actually listening to what the president has to say.
We need leaders, and I don't see to many of them sadly. we could have been the leading country in Africa. shown everyone how its done. we have done the opposite.
The ruling party cant even provide electricity to its people everyday. don't even start with water and sanitation, crime etc.
One thing is for sure, they aren't the one's who will turn things around for us.
I do have hope for the rest of Africa as you have pointed out. so many countries are doing better than expected.
Interesting facts about Africa in 2024. Also to add, as democracy continues to be fought, sparks resulting from the ruling parties and the opposition parties are inevitable. Dissenting voices will be brutally crashed considering that the ruling parties hardly accept any defeat. At worst, they can manipulate election results or Outmaneuver how voting is done. Activists are at risk of being eliminated like it has happened in Rwanda and recently in Kenya (meru County).