Africa Economies – Overview
Sub-Saharan Africa, home to more than 1 billion people, half of whom will be under 25 years old by 2050, is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region, enabling Africans across the continent to live healthier and more prosperous lives.
With the world’s largest free trade area and a 1.2 billion-person market, Africa is creating an entirely new development path, harnessing the potential of its resources and people.
Africa is composed of low, lower-middle, upper-middle, and high-income countries, 20 of which are fragile or conflict-affected. Africa also has 13 small states, characterized by a small population, limited human capital, and a confined land area.
Effect of the COVID-19 Pandemic
The economic impact of the COVID-19 shock in Sub-Saharan Africa is severe. However, countries in the region are continuing to weather the storm.
Economic activity in Sub-Saharan Africa is estimated to have contracted by 2% in 2020, reflecting a slower-than-expected spread of the virus and lower COVID-19-related mortality in the region, strong agricultural growth, and a faster-than-expected recovery in commodity prices.
Nevertheless, COVID-19 has plunged the region into its first recession in over 25 years, with activity contracting by nearly 5% on a per capita basis. It has also exacerbated public debt vulnerabilities, which are high and continue to rise in many countries.
Vulnerable groups, such as the poor, informal sector workers, women, and youth, suffered disproportionately from reduced opportunities and unequal access to social safety nets.
This situation could push up to 40 million people into extreme poverty, erasing at least five years of progress in fighting poverty.
In East and Southern Africa, the growth contraction in 2020 is estimated at –3%, 0.9 percentage points less than projected in October 2020, mostly driven by South Africa and Angola—its two largest economies.
Mining dependent economies such as Mozambique and Zambia continued to experience output contractions in the second half of 2020.
Growth in Western and Central Africa contracted by 1.1% in 2020, less than projected in October 2020 partly due to a less severe contraction in Nigeria, the subregion’s largest economy, in the second half of the year.
Real gross domestic product in the subregion is projected to grow by 2.1% in 2021 and 3.0% in 2022. Fragile countries in the region are expected to experience a strong decline in growth as COVID-19 (coronavirus) exacerbates the drivers of fragility.
Sub-Saharan Africa’s recovery is expected to be multi-speed, with significant variation across countries. Nigeria, South Africa, and Angola, the region’s three largest economies, are expected to return to growth in 2021, partly owing to higher commodity prices, but the recovery will remain sluggish.
Growth is projected to rebound to 1.4% in Nigeria, 3% in South Africa, and 0.9% in Angola. Muted near-term growth prospects and slow vaccine rollout in the largest economies will weigh on the region’s outlook.
Mining dependent economies, such as Botswana and Guinea are also expected to see robust growth in 2021 driven by a rebound in private consumption and investment as confidence strengthens and exports increase.
Pace of COVID-19 Vaccine Deployment
Faster progress on vaccine deployment along with credible policies to stimulate private investment would accelerate growth to 3.4% in 2021 and 4.5% in 2022 in Sub-Saharan Africa.
Alleviating the debt burden will release resources for public investment in areas such as education, health, and infrastructure. Investments in human capital will help lower the risk of long-lasting damage from the pandemic, which may become apparent over the longer term, and can enhance competitiveness and productivity.
Fastest Growing African Economies 2022 and forecasts for 2023
The list below gives a summary of all African countries and their projected growth rates for 2022 and 2023.
|16||Democratic Republic of the Congo||5.60%||6.60%|
|32||Central African Republic||4.00%||5.00%|
|43||São Tomé and Príncipe||2.90%||3.30%|
|47||Republic of Congo||2.30%||3.00%|
The next 12 months will be a critical period for leveraging the African Continental Free Trade Area, to deepen African countries’ integration into regional and global value chains. Reforms that deliver reliable electricity, including better functioning of public utilities, can power the manufacturing sector and the digital economy.
Finally, reforms that address digital infrastructure gaps and make the digital economy more inclusive—ensuring affordability and building skills for all segments of society—are critical for improving connectivity, boosting digital technology adoption, and generating more and better jobs for men and women.