Africa

Botswana

Omicron shines spotlight on low vaccine coverage

The emergence of the Omicron strain of COVID-19 reinforces the need to boost vaccine coverage in Sub-Saharan Africa from current low levels. Most countries have administered at least one vaccine dose to less than 20% of their populations. The South African authorities’ initial response to the ‘Omicron threat’ was to urge the take-up of vaccines, rather than tightening containment measures. And so long as vaccine coverage is low, the risk of intermittent curbs on activity to relieve strains in health care sectors will linger with future virus waves and variants. Achieving such vaccine coverage will probably take some time even as Africa’s vaccine supplies – including from China and India – look set to increase over the coming quarters.

30 November 2021

The Omicron variant and the threat to EMs

There’s a lot that we don’t know about the new Omicron variant. But if it proves more virulent, the economic fallout would probably be largest in EMs in parts of Africa and South and South East Asia that have lower vaccination rates, more limited fiscal space and/or larger tourism sectors. The new variant may also temper the pace of tightening cycles in parts of the emerging world. In view of the wider interest, we are also sending this Emerging Markets Economics Update to clients of all our Emerging Markets services.

29 November 2021

Hope on vaccines, but still a long way to go

COVID-19 vaccine coverage remains pitifully low across much of Sub-Saharan Africa, with less than 10% of populations having received at least a first dose in most countries. But there are signs that things may be slowly turning a corner. The rate of vaccination has picked up in recent weeks and there are growing hopes that this trend will continue as the supply of vaccines to the continent improves. That said, there is still a long way to go to reach the high vaccine coverage achieved in other parts of the world. What’s more, even as supply improves, other hurdles such as logistical challenges and vaccine hesitancy may still hinder progress. In the meantime, the region will remain vulnerable to fresh virus outbreaks and the threat of tighter restrictions will continue to cast a cloud over the economic outlook.

28 October 2021
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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.

Pandemic not in the rear-view mirror for some time

The economic damage from the latest COVID-19 waves across Sub-Saharan Africa appears to be smaller compared to previous waves, but low vaccination rates mean that officials will have to keep containment measures in place for longer than elsewhere. This will hold back recoveries and prevent international travellers from returning quickly – a particular problem or countries like Kenya and Namibia.

Third wave fears grow

Worries about a third wave of COVID-19 in the region have intensified in the past month and the tightening of lockdown measures in some countries – most notably South Africa – will weigh on recoveries. As things stand, surges in cases appear concentrated in countries in the south of the continent; cases have trended down in many of the region’s other large economies (e.g. Nigeria, Ghana and Ethiopia). With vaccine rollouts progressing at a snail’s pace amid low supplies across the region, fresh virus outbreaks will remain a persistent threat to the outlook. The glimmer of hope is that global powers are looking to increase vaccine supplies and, perhaps most importantly, China could be in a position to flood the world with easily-deployable jabs later in the year.

A Multispeed Recovery

GDP figures released this month showed that the economic fortunes of Africa’s largest economies diverged in Q2. South Africa’s economy rebounded after a brief recession at the turn of the year. While investment spending remained weak, strength elsewhere in the economy pushed headline GDP growth to a fourquarter high. In Nigeria, by contrast, growth disappointed in Q2. The economy did exit recession, but the very weak performance of the non-oil sector held back headline growth. Among Africa’s smaller economies, recent news was more positive. Growth in Ghana surged in Q2. Recent activity data from Angola, Ethiopia, Zambia, and Uganda all pointed to stronger performances in recent months.

Frontier recovery still on track

The recovery in frontier economies continued over the first half of this year. GDP growth averaged around 2.0% y/y in Q1, twice the rates seen in mid-2016. It would have been stronger still were it not for weakness in the largest frontier market, Saudi Arabia. Cuts to oil production there as part of an OPEC agreement caused the economy to contract by 0.5% y/y. More timely figures suggest that most economies fared well in the second quarter.

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