Africa Economic Outlook

Africa Economic Outlook

Headwinds beyond vaccine woes intensifying

Extremely low vaccine coverage continues to cast a dark cloud over recovery prospects in Sub-Saharan Africa and this will be compounded by deteriorations in the terms of trade and tighter fiscal policy. As a result, rebounds in most economies will lag behind other EMs. Sovereign debt risks look acute in Ethiopia and are growing in Ghana, while South Africa faces a slow-burning problem.

27 October 2021

Africa Economic Outlook

Lagging behind

Vaccination campaigns across Sub-Saharan Africa will continue to struggle, leaving the region vulnerable to renewed virus outbreaks. This, combined with tight fiscal policy, a slow return of tourists and falls in commodity prices means that economic recoveries will lag behind those in other parts of the world. GDP across most of the region is likely to stay well below its pre-crisis path over 2021-23.

5 August 2021

Africa Economic Outlook

Recovery in slow motion

Slow vaccine rollouts, tight fiscal policy and weakness in tourism sectors will hold back recoveries across Sub-Saharan Africa. Virus containment measures will probably remain in place for some time, depressing activity. Meanwhile, some countries, like South Africa and Angola, are turning to austerity to tackle worrying debt trajectories. Debt restructuring is already underway in some places and risks remain high in Kenya and Ghana. Elevated commodity prices will provide support to oil producers (Nigeria, Angola), industrial metal exporters (South Africa, Zambia) and gold producers (Uganda, Tanzania). But GDP across most of Sub-Saharan Africa is likely to stay well below its pre-crisis path over 2021-23.

28 April 2021
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Africa Economic Outlook

Late to the vaccine recovery

The second waves of COVID-19 currently ripping through Sub-Saharan Africa will keep economic activity depressed over the coming months and, even once vaccines belatedly reach the region, recoveries will remain sluggish. The three largest economies – Nigeria, South Africa and Angola – are set to fare particularly badly. The latter two will probably turn to austerity to put debt trajectories on a more sustainable path. Most other countries in the region will end up living with the legacy of higher debt as global debt relief efforts fail to make more headway. Tourism-dependent economies in Southern Africa will probably stand out with stronger recoveries as visitors trickle back.

28 January 2021

Africa Economic Outlook

Weak recoveries, default risks still high

Recoveries across Sub-Saharan Africa will be weak, with the region’s three largest economies – Nigeria, South Africa and Angola – set to fare particularly badly. A rebound in tourism sectors has been delayed, low oil prices will weigh on growth in key producers and fiscal support is likely to remain limited. Broad debt relief plans for the region are at an impasse. Most countries will probably end up living with larger debt burdens, with South Africa set to turn to financial repression and Nigeria likely to fire up the central bank’s printing press. But there is a high risk that other stressed sovereigns follow Zambia’s lead and turn to unilateral (and, ultimately, messy) defaults.

Africa Economic Outlook

Debt risks growing

South Africa, the oil producers (Angola and Nigeria) and tourism-dependent economies (Mauritius, Namibia and Botswana) are all likely to suffer particularly weak recoveries over the coming quarters. Many of the smaller economies in the region will require further public debt relief. Nigeria and South Africa don’t face the same kind of immediate financing problems, but public debt ratios are on unsustainable upwards trajectories.

29 July 2020

Africa Economic Outlook

Steep regional recession, default risks growing

Sub-Saharan Africa is set for one of its worst downturns in decades this year. The hardest hit economies are likely to be South Africa (due to its stringent lockdown measures), the large oil producers (Nigeria and Angola), and tourism dependent economies (Mauritius and Botswana). And given the difficulty of containing the virus on the continent, there is a real risk that the damage caused by social distancing is more protracted than elsewhere. The fiscal cost of the crisis will push many African countries towards debt restructuring.

24 April 2020

Africa Economic Outlook

Another disappointing year

Economic growth in Africa is likely to come in at just 3% this year, as the slump that began in 2015 drags on. The limit on regional growth will, again, come from South Africa where hopes for a meaningful rebound this year look too optimistic. We also think that Angola’s recession will continue. And while growth in Nigeria will accelerate a touch, we expect that the economy will stay weak. Smaller economies such as Ethiopia and Kenya should continue to outperform. Across the region, public debt problems will mount. The need for fiscal adjustment is particularly pressing in Nigeria, Ghana, and Zambia.

30 January 2020
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