GDP growth is likely to pick up over the coming quarters as inflation falls back in most SSA economies and monetary easing cycles broaden out. The external environment will remain challenging, although the sharp currency falls of last year are unlikely to be repeated. Tight fiscal will act as a key headwind and we think GDP growth will still undershoot consensus expectations over the course of 2024-26. Sovereign debt restructuring talks in Ghana and Zambia are reaching their end-game but are proceeding slowly in Ethiopia. That reinforces fears that for other countries at risk of default, such as Mozambique, a difficult process could await.
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