SSA Output Growth in 2020: Overall momentum to remain soft

Recently, the World Bank published a forecast for Sub-Saharan Africa (SSA) economic growth to rise from 2.4% in 2019 to 2.9% in 2020. This was predicated on improving investor confidence in some large economies, a strengthening cyclical recovery among industrial commodity exporters along with a pickup in oil production, and robust growth among agricultural commodity exporters.

For us, we expect growth in South Africa to remain weak, as cases of load shedding or blackouts continue to drag industrial growth. Also, we expect growth to remain tepid in Nigeria and Angola as both economies remain exposed to the vagaries of the oil market. Election uncertainties may dampen fresh foreign investment in seven countries (Ghana, Ivory Coast, Burkina Faso, Burundi, Seychelles, Tanzania, and Togo) scheduled to hold Presidential elections in 2020.

Nonetheless, we expect growth in the smaller economies to continue to support the region’s growth. Specifically, we project that economic activity in Rwanda will remain supported by export growth (resulting from the Made in Rwanda policy) and continued public investments.  Also, we opine that the recent removal of interest rate caps, which have constrained credit supply in Kenya for years, should spur new lending to private sector and impact overall growth positively.

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