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After a long period of sustained economic growth and resilience after the global financial crisis, sub-Saharan African economies are now, as a general trend, being negatively affected by a high dependence on raw material exports.
This is one of the findings from a Commerzbank report, “Sub-Saharan Africa: Tackling the headwinds after the economic turnaround”, that offers a macroeconomic outlook for the region, explores targeted case studies for selected countries, and sets out a ‘growth agenda’ for the future of Africa’s foreign trade, industry, agriculture, labour and finance markets.
The study notes that, in the wake of the commodity-price downturn, “the first hard-hit countries were Africa’s largest oil producers, such as Nigeria and Angola”, and suggests that “growing economic imbalances, withdrawal of capital by international investors, and the absence of structural reform and diversification efforts” pose severe implications for countries across the region.
However, Christian Toben, Commerzbank’s regional head of Africa, comments: “Every cloud has a silver lining. We are closely observing how individual countries of the region -from Angola to Zambia -are tackling these challenges and taking their chance to strengthen their market performance.”
Despite Nigeria’s increasing challenges, the economy still holds the keys to growth. The country’s success will depend on a “rapid fiscal adjustment and diversification of its economy to reduce the government’s dependence on oil revenues”.
Elsewhere, an economy making particular headway is Ivory Coast, which has grown by 8% to 10% since 2012, “driven by reforms in the agricultural sector, brisk transportation and construction activities as well improved private-sector investment”, all helped by political stability in the country.
On the other side of the continent, Tanzania’s service sector has spurred solid growth of “around 7% of GDP over the last five years”.