Strong domestic demand to help Africa outperform

The growth outlook for sub-Saharan Africa (SSA) remains good. Admittedly, the region will not be immune from global headwinds, particularly from the ongoing recession in Europe. Export demand may also suffer if, as we expect, the rebound in China peters out later this year. But external weakness should be more than offset by the strength of domestic demand. Household consumption remains strong, and increasing investment, particularly into natural resource sectors, will remain an important prop to growth. We expect SSA as a whole to grow by around 4.8% in 2013 and 5.5% in 2014, making it the second-fastest-growing emerging market region after Asia. The main exception to an otherwise positive outlook is region’s largest economy, South Africa. Here, we expect growth to remain extremely subdued amid ongoing problems in the mining sector and rising inflation.