Africa’s growth recovery in 2022: What to expect?

Analysis

While the rest of the world is set to experience a sluggish 2022, Africa’s growth is expected to accelerate this year.

Despite low vaccine access, the emergence of new COVID-19 variants, and corresponding travel bans imposed across the world, experts predict a positive, albeit uneven, economic outlook for Africa in 2022. In contrast to the rest of the world, Africa ended the year on a positive note. Whereas in North America, Europe, and East Asia trade growth rates were relatively muted in the second half of 2021, Africa recorded a strong performance with a 20% increase in exports, and a 21% increase in imports compared to 2019. Despite the risks associated with future waves of infection, especially given the low vaccination rates across much of the region – on average, just over 10% of Africa's is fully-jabbed – there is good news. Benin, Côte d’Ivoire, Gabon, and Seychelles have avoided a severe hit from the pandemic and are expected to bounce back in 2022, as suggested by their recent sovereign rating upgrades. In the same vein, Kenya, Ghana, Senegal, Rwanda, and Seychelles should reach pre-pandemic growth rates, according to the latest IMF outlook. Nevertheless, the recovery will be partial, and may not be as strong among Africa’s largest economies. Particularly, Nigeria, Angola, South Africa, Ethiopia, and Zambia will not be among the ones that bounce back in 2022. Even if some of the main oil exporters, such Angola and Nigeria, have already gone through a period of adjustment since the 2014-2015 oil price crash, their economies remain deeply reliant on oil. The surge in prices will provide a welcome boost but will fall short of enabling a healthy and sustained recovery. Ethiopia and Zambia, both of which are in the process of seeking debt restructuring through the G20 Common Framework, could have to wait until 2023 for a brighter economy. The same applies to South Africa, which entered the pandemic in a recession, and is set to travel a rocky road. At a continental level the pace of climate change, inflationary pressures, and new COVID-19 variants will continue to test Africa’s resilience. Yet, in the past year, African policymakers have demonstrated their ability to boost their economies while simultaneously dealing with repeated Covid-19 outbreaks. One can be hopeful that the combination of subsiding pandemic restrictions, economic stimulus packages, and increases in commodity prices will bode well for Africa’s trade and growth in 2022.