The continent’s economic drivers pick up momentum after activity was halted by the coronavirus pandemic, despite a slower pace of vaccinations compared with the rich world. Sub-Saharan Africa was expected to recover in 2021, growing 3.3% after contracting nearly 2% last year. The International Monetary Fund forecast growth for the region at 3.4% this year from an estimated contraction of 1.9%. A recovery as economies eases restrictions and activity in crucial sectors such agriculture, manufacturing, and tourism picks up. Growth was expected this year from all the major economies with Angola at 1.6%, Ghana at 4.9%, Kenya at 5.1%, 2.0% for Nigeria, South Africa at 3.7% and 2.0% for Zambia. South Africa, the continent’s most industrialized economy, together with Angola and Nigeria contribute around 50% to sub-Saharan Africa’s economic engine. Much healthier commodity prices are likely to buoy growth there. Economists warned some growth rates were calculated from a very low base and might not be sustainable in the following two years, particularly in South Africa where growth is expected to slow to 2.1% and maintain that pace.
Inflation in South Africa is likely to moderate, seen just below the midpoint of the central bank’s 3%-6% comfort level this year – and the following two years – despite risks skewed more to the upside over the coming year. The South African rand has been resilient in past months, helping to keep interest rates stable. Economists expected security challenges in Nigeria — Africa’s biggest economy — to likely continue to make food expensive, owing to slowed agricultural activity and logistical issues. Hard currency shortages and monetary financing also pose significant risks to the Nigerian inflation outlook.