Grim outlook for major economies, optimism elsewhere

Growth in Sub-Saharan Africa’s two largest economies (Nigeria and South Africa) will remain depressed in 2016 but we expect better performances from the region’s smaller markets. Nigeria’s oil-focused economy has been battered by low crude prices and the government’s bungled response has only made the situation worse. A full-blown balance of payments crisis is now possible. South Africa’s problems are more structural; the country suffers from aging infrastructure, rising inflation, and 25% unemployment. Potential growth is now firmly below 2.0%. But lasting struggles in Nigeria and South Africa should not distract from more positive stories elsewhere. Growth in Kenya is accelerating as investment surges. Tanzania, Côte d’Ivoire, and Mozambique will all probably see growth of above 7% next year. Even long-suffering Ghana looks set for a gradual economic recovery. Weak growth in the major economies means that regional growth may disappoint, but this figure hides huge variation across the continent.