Analysis of headline GDP figures in Africa would presuppose a region going through a period of prolonged stagnation, with growth slowing down to 2.2% in 2016 off the back of falling commodity prices and tighter Chinese economic conditions – but this needs to be put into proper context. Nigeria and South Africa are the two biggest regional economies and the main bulwarks behind the continent’s growth, and both markets have contracted. Slowdowns in these two countries tend to have a disproportionate weighting on the overall region’s growth figures.
Nigeria has very specific problems related to the decline in oil price, and this has been exacerbated by various currency and policy decisions. South Africa’s economy is under strain due to a combination of different factors including drought, declining political confidence, reduced business confidence and a commodity slowdown. Just because growth has been sluggish in these two markets though does not mean there is a universal slowdown across the entire Africa region.
A number of other African markets have recorded strong growth presenting opportunities for foreign investors. Côte d’Ivoire’s economy is forecast to expand by 7.5% in 2019 while World Bank data stated Senegal was the second fastest growing West African market. East Africa is a strong performer too, with Kenya, Ethiopia, Uganda and Tanzania all forecast to grow 6% and above for the decade.