DAVID MASONDO: Can Africa achieve a more sustainable economic path?

Africa has an economic growth challenge. While the past two decades have demonstrated its potential, the recent stagnation, compounded by global crises and structural weaknesses, has placed the continent at a crossroads. The question is whether Africa can transition from slow and uneven growth to a more sustainable and resilient economic trajectory. 

Africa’s growth stagnation — a crucial juncture 

Between 1998 and 2007, Sub-Saharan Africa grew at an average annual rate of 4.8%. While this was an encouraging period, it lagged China’s impressive 10% growth rate during the same period. SA, one of the continent’s leading economies, grew at a comparatively modest 3.72% per year. However, the 2008/09 global financial crisis, followed by the Covid-19 pandemic and the geopolitical turmoil arising from the war in Ukraine, significantly disrupted these growth trends, pushing many African economies into recession. 

Yet there are reasons for optimism. The International Monetary Fund (IMF) projects that Sub-Saharan Africa will achieve a growth rate of 3.6% for the 2024/25 financial year, accelerating to 4.2% in the following year. However, SA’s growth remains sluggish with 1.9% forecast in 2025/26, from a revised estimate of 0.8% in 2024, well below the rates needed to address unemployment and structural economic challenges. 

Alongside the Asia-Pacific region, Sub-Saharan Africa is poised to become one of the world’s fastest-growing regions. This anticipated growth will be driven by a gradual economic shift away from traditional sectors such as mining and agriculture towards high-value industries, including manufacturing, energy, and information and communication technology.

Breaking free from the commodity dependence trap 

One of Africa’s most pressing economic challenges is its over-reliance on primary commodities for exports and government revenue. For instance, primary commodities account for over 60% of total exports from Sub-Saharan Africa (World Bank, 2021). In Nigeria, oil exports constitute 90% of total exports and 70% of government revenue. Similarly, Botswana derives 80% of its export revenue from diamonds, while Zambia relies on copper for 70% of its export earnings. 

This dependence renders African economies highly vulnerable to fluctuations in global commodity prices. A stark example of this vulnerability is Nigeria’s economic downturn when global oil prices fell by 70% between 2014 and 2016, leading to a GDP contraction of 1.6% in 2016. Similarly, Zambia suffered a significant economic slowdown when copper prices plummeted by 50% between 2011 and 2016, sharply reducing export revenues, according to IMF.

Structural transformation — the key to economic resilience 

A fundamental shift is required to move Africa away from the dependence on primary commodity exports such as oil, minerals, and agricultural products. The global drive towards decarbonisation presents an opportunity for Africa to accelerate diversify its economic structure through spurring industrialisation by leveraging its abundant mineral resources essential for the production of low-carbon technologies. However, industrial diversification must be intentional, with clear policy frameworks that create a conducive environment for manufacturing and value-added industries. 

The world’s fastest-growing economies are those with diversified industrial structures. To achieve this, African nations must invest in its infrastructure, implement structural reforms that encourage private sector investment. China’s success story provides valuable lessons, reducing over-regulation and liberalising state-dominated industries has played a crucial role in driving its rapid economic transformation. SA’s ongoing efforts to liberalise network industries such as energy and freight logistics are steps in the right direction. 

This will also require strengthening regional integration to create economies of scale and attract global investors. Cross-border initiatives, such as the Standard Gauge Railway in Tanzania, have the potential to boost trade and economic integration under the African Continental Free Trade Area (AfCFTA). 

Maintaining macroeconomic stability 

Sustained economic growth is closely tied to macroeconomic stability. While some African nations have made progress in reducing inflation and narrowing budget deficits, debt vulnerabilities remain a significant challenge. According to the IMF, nearly 50% of Sub-Saharan African economies are at high risk of debt distress, with debt-to-GDP ratios rising in several countries despite efforts to stabilise fiscal conditions. Additionally, interest payments consume an average of 22% of government revenues, limiting fiscal space for growth-enhancing investments.

Infrastructure development is a critical enabler of economic competitiveness. Efficient transport, energy, and digital infrastructure enhance productivity and attract investment. However, Africa faces a staggering infrastructure funding gap, estimated at $130bn to $170bn annually. Despite the funding gap, there is no shortage of capital available for investment in African infrastructure projects. However, the key barriers to unlocking private sector capital include the following: 

• A lack of bankable projects with return that make commercial sense.
• Regulatory and policy uncertainties that deter long-term investment. 
• Bureaucratic inefficiencies in public-private partnerships (PPPs). 

The path forward

Africa’s economic future will be shaped by the decisions we, as policymakers, business leaders and development partners, make today. We cannot afford complacency. Growth will not happen by default, it must be designed, enabled and sustained through deliberate choices. 

As government, we recognise that structural reforms are not just desirable; they are imperative. We are committed to fostering an environment where private sector investment can thrive, where infrastructure bottlenecks are removed, and where industrial diversification becomes a reality rather than an aspiration. But we cannot do this alone. 

We need the private sector to step forward, not just in identifying challenges but in co-investing in solutions. We need financial institutions to work with us to close the infrastructure funding gap, moving beyond risk aversion to shared value creation. And we need regional collaboration to ensure that Africa’s growth is not fragmented but interconnected, leveraging the AfCFTA to build scale and resilience. 

Africa’s young and dynamic population is our greatest asset. If we build an economy that creates jobs, fosters innovation, and attracts long-term investment, we will not just achieve growth; we will shape a globally competitive Africa. The time for incremental progress is over. Now is the moment for bold, co-ordinated action. As the government, we are prepared to lead, but we need all of you to join us in making this vision a reality. 

• Dr Masondo is deputy finance minister.