Economy

Africa’s GDP grew  6.9% in 2021

Africa’s Gross Domestic Product grew by an estimated 6.9 per cent in 2021, a report has revealed but the continent still faces uncertainty.

Leading global specialist risk consultancy, Control Risks and its economics consulting partner, Oxford Economics Africa disclosed this in the just concluded Africa Risk-Reward Index seventh edition event.

The seventh edition themed, “Opportunity through uncertainty was held on the 20th of September, 2022 in London, United Kingdom.

Africa Risk-Reward Index is an authoritative guide for policymakers, business leaders, and investors that gives detailed reports on developments in the investment landscape in major African markets, it also delivers a grounded, longer-term outlook of key trends shaping investment in African economies.

In 2021, the pandemic and the Russia-Ukraine war which will continue to impact Africa’s economic outlook directly pushed 30 million people into extreme poverty.

22 million people have also been recorded to have lost their Job with an estimated rise to 1.8 million lost jobs by 2022.

This year’s risk-reward scores paint a picture of a continent at an inflexion point, where opportunities abound at a time of high uncertainty.

Three major themes, Shaping Africa’s role in the global energy transition, Solving Africa’s food security conundrum and Cash-strapped governments navigating a wave of discontent were outlined in the report summarising the views of Africa’s trajectory.

Speaking on Africa’s role in the global energy transition, Senior Analyst at Control Risks, Patricia Rodrigues said,

“The [energy] transition in Africa needs to be staggered; many countries have and will exploit their fossil fuels while also developing their focus on renewables. Countries with high LNG potential, such as Angola, Mozambique, Tanzania, and Nigeria, will see sustained investor interest, and conversations around ending flaring will be important to watch,”

“Private actors will need to be mindful of political risks, given competition for projects in saturated markets, as well as contractual issues with governments, which can lead to delays. Investors should be aware of the environmental, social, and governance (ESG) concerns associated with their industry, given the potential for “greenwashing” and the continued extractive nature of many projects,”

On solving Africa’s food security conundrum, Rodrigues said, “Africa’s dependence on imports of even the most basic foodstuffs is one of its most pressing issues”, according to Jacques Nel, head of Africa macro at Oxford Economics Africa.

“Given the continent’s dependence on rainfed agriculture and susceptibility to climate change, in the context of an international shift towards shoring-up national food security, the situation could deteriorate further.”

He continued, “Addressing this issue will require investment, both public and private, in storage & warehousing, agro-processing, agricultural infrastructure, and financial services. Technological developments in the fintech and agricultural sectors, as well as progress on the AfCFTA, could catalyze the development needed.”

The Africa Risk-Reward Index is defined by the combination of risk and reward scores that integrate economic and political risk analysis by Control Risks and Oxford Economics Africa.

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