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Growth in Africa

August 25, 2020 | Financial Planning
Growth in Africa

Impact of COVID-19 and the Global Economic Slowdown

The publication of Q1 growth data across Africa has pretty much been in line with expectations given that January and February were normal months in terms of economic activity, with travel restrictions and national lockdowns only really coming into effect from mid-March. The data, however, does help us think about how the COVID-19 pandemic and global economic slowdown will impact African growth in 2020.

Apart from South Africa, which is also going to record some pretty grim growth numbers in 2020, we expect that Morocco is likely to have one of the worst growth outcomes if the path mapped out by Le Haut Commissariat au Plan (HCP) comes to pass. Instead, we expect that the growth numbers in Q2 across Africa are more likely to be in the -2% to -5% range. For countries at the lower end of this fall in growth in Q2 2020, we suspect most are still likely to record overall positive growth numbers for 2020.

While COVID-19 and the global economic slowdown are important factors impacting the economic outlook in Africa in 2020, it is made much worse in countries where the COVID-19 impact is combined with domestic issues.

We expect higher growth outcomes than the IMF is currently forecasting in many of the mid-sized economies in Africa, notably Cameroon, Cote d’Ivoire, Ghana, Kenya, Tanzania, and Senegal. This potentially means that we would expect overall growth outturn for SSA, excluding Nigeria and South Africa, to be a small positive number in 2020 although this still represents a significant fall in GDP per capita.

 

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