The past year has been difficult for many markets in Sub-Saharan Africa (SSA). Dramatic currency fluctuations, depressed prices on commodities such as oil and copper, and sluggish demand from China and Europe (Africa’s largest trade partners) have put pressure on the region’s economies. While SSA was predicted to grow above 5% year-over-year in 2015 at the beginning of the year, actual GDP growth is more likely to come in at around 3–4% year-over-year. Growth in 2016 is unlikely to be much higher.
As a result of these pressures, 2015 performance has been disappointing, leading some Western multinationals to reduce their exposure to the region, and a few are even considering leaving. Nestlé announced plans to cut its staff in some central African countries, while Barclays’s new CEO is considering selling off the bank’s Africa assets.
However, although some of our clients have been facing difficulties resulting from the current environment, primarily because of currency pressures, many others are continuing to see strong growth, even in troubled markets such as South Africa and Angola. For example, despite subdued consumer demand, new clothing retailers are moving into South Africa to tap the country’s underserved middle class. And despite government revenues having been hit hard in Angola, medical device companies are still selling expensive equipment to the ministry of health.