African Export-Import Bank (Afreximbank) just released its African Trade and Economic Outlook report for 2024. Titled “A Resilient Africa: Delivering Growth in a Turbulent World,” details the continent’s recent economic output, challenges, and growth predictions.
The title reflects Africa’s potential as an economic powerhouse. The continent’s combined GDP grew by 3.5% in 2024 amid ongoing global conflict and uncertainty, compared to 2.5% growth in the United States.
Expanding African Economies
Although growth is tangible, a series of “global shocks” have hindered development. These hurdles include the 2022 conflict rekindled in Ukraine and the global supply chain issues of 2021 onward. While African global trade receded alongside GDP growth during this period, intra-African economies expanded.
The Carnegie Endowment for International Peace (CEIP) published its annual list of the world’s fastest-growing economies. Among the world’s top performers in 2024 are nine African countries, five of which are in West Africa:
Niger;Senegal;Libya;Rwanda;Côte d’Ivoire; Djibouti;Ethiopia; The Gambia;Benin.
Niger’s Promise Under Threat
Perhaps most surprising is Niger’s being Africa’s quickest-expanding economy, considering its sectarian issues. In 2023, Niger underwent a coup d’etat when the military ousted the country’s democratically elected leaders, Mahamadou Issoufou and Mohamed Bazoum.
The Africa Center for Strategic Studies webpage explains what has happened since, pushing GDP growth from a rampant 26% down to 7% in 2023. However, even while Niger’s military junta strengthens its chokehold on the economy, the country will still see 12.5% GDP growth in 2025.
Senegal Leads the Future Race
The second-placed nation, Senegal, was described in a 2023 International Monetary Fund (IMF) review as “one of the strongest growing economies in sub-Saharan Africa.” Like most of the world’s economies, it saw a dip following the pandemic, and public debt is still a sizable chunk of the GDP.
Despite this issue, Senegal is emerging as one of the continent’s most exciting international investment opportunities. This year marks the first time Senegal exported its domestic crude oil, following the production of its first batch in June this year.
Global oil conglomerate Woodside Energy publicized the results of its first oil production project at the Sandomar Field, an offshore facility south of the capital, Dakar. The company’s website boasts engaging 60+ communities in its collaboration with the Senegalese government.
Capitalizing on Mineral Wealth
What’s more, Senegal’s vast gas reserves mean the country’s fossil fuel wealth will stabilize its economy in the coming years. Meanwhile, LNG Prime posted an article about British Petroleum’s (BP) Greater Tortue Ahmeyim floating liquified natural gas (FLNG) project, which is well underway.
It means Senegal will join the world’s liquified natural gas-producing community later in 2024. If that wasn’t enough good news for Senegal, its agricultural prospects have an equally positive outlook. Senegal’s phosphate wealth is reportedly enough to last 500 years, according to Energy Capital & Power.
Untapped Potential
Africa has long been touted as an economic “sleeping giant.” In 2009, Michael Morris published a book, Awakening Africa’s Sleeping Giant – Prospects for Commercial Agriculture in the Guinea Savannah Zone and Beyond. His hypothesis: Africa wasn’t getting value on its vast agricultural potential, namely in the Guinea Savannah Zone.
He compared the highly fertile region to Brazil and Thailand. Their respective Cerrado and Northeastern regions broke into crucial global markets at a time when Africa’s export value was falling. The untapped fertile grasslands, stretching across sub-Saharan West Africa, remained mostly fallow 15 years ago.
In the years since, the region has experienced huge changes, bolstering some of the region’s fortunes. Ghana is the second-largest cocoa producer in the world — after neighboring Côte d’Ivoire. Its northern region sits right on the Guinea Savannah Zone.
Ghana Is Growing in Confidence
In 2021, President Nana Addo Dankwa Akufo-Addo addressed the Federal Council of Switzerland, declaring a new era of Ghanaian production. “Ghana no longer wants to be dependent on the production and export of raw materials, including cocoa beans,” said President Akufo-Addo. “We intend to process more and more of our cocoa in our country with the aim of producing more chocolate ourselves.”
Though the financial motivation for such a move is obvious, the president also connected his announcement to Ghana’s status. His speech demonstrated that while Ghanaians wish to add value to their national product, adding value to their national pride is equally important.
Earlier in 2024, Association of Ghana Industries (AGI) president Dela Gadzanku made public his intention to build a chocolate production hub in the Volta region. Gadzanku disclosed his ambitions in a public school appearance in the Ho Municipality, stating that the region “deserves a chocolate factory” for its role in cocoa production. Ghana News Agency reports that AGI has started feasibility studies in the mountainous region.
The Pitfalls of Economic Ambition
However, progress toward this new economic dawn has been hampered by price gouging, prompting smugglers to siphon off large parts of the product. Reuters reported how Ghana’s cocoa production had hit a proverbial iceberg.
A blend of poor weather, illegal gold mining, and a disease known as “swollen shoot virus” all contributed to a low yield. The latter is responsible for the loss of 500,000 hectares of farming land. Subsequently, Ghana’s 2023/2024 harvest was expected to fall 40% short of targets.
Clearly, unharnessing Africa’s vast mineral and agricultural wealth will come with many hurdles.
