According to the Institute of Chartered Accountants in England and Wales (ICAEW), Africa’s economic diversity will shield it from the slowing global GDP growth. A report by the professional accountancy body finds that, despite there being a gloomy backdrop created by slow growth in the United States, China and Europe, Africa remains a relative bright spot with many positive economic stories. It also suggests that Africa will be home to half of the ten (10) fastest-growing economies in the world over the next five years.
Compared to returns in other economies in the world, Africa’s growth performance has continued to impress and attract investments that keeps the continent on a growth trajectory.
East Africa’s economic growth is particularly expected to remain robust, easing slightly from 6.3% in 2019 to 6.1% in 2020. Most of the region’s economies continue to benefit from lower international commodity prices while the consumption-driven growth structure prevalent in the region insulates these economies from the global trade slowdown.
Economic growth in the franc zone is also expected to remain strong, increasing from 4.7% in 2019 to 4.9% in 2020. Côte d’Ivoire’s effective exploitation of its mineral and agricultural resources has been accompanied by an ambitious government development plan, while Senegal’s relatively diversified economy has been supported by the Plan Senegal Emergent development strategy.
Meanwhile, North Africa’s economic performance remains volatile due to instability in Libya, with regional growth picking up from 2.8% this year to 4.5% in 2020. In Egypt, the region’s economic anchor and favourable policy adjustments are translating into improved macroeconomic fundamentals and a positive growth outlook.
Although it will pick up next year, GDP in the continent’s other regions will remain relatively subdued, largely due to lacklustre performances in Nigeria, Angola and South Africa. Growth in West & Central Africa is expected to increase from 3.4% in 2019 to 3.7% next year, largely held back by a subdued economic performance by Nigeria due to some erratic and ineffective policy decisions. In Southern Africa growth is expected to come in at 2.2% in 2020 compared with a 1.3% expansion in 2019. The South African economy will keep stagnating this year, also due to policy uncertainty, while electricity constraints have had a negative impact on industry and have deterred investment in general.
The full Economic Insight: Africa report can be found here: