Morocco, Kenya, and Ghana are expected to be Africa’s fastest-growing major economies

After experiencing its worst recession in a half-century in 2020, Africa’s economy is expected to grow at a healthy 3.8 percent in 2021, driven by increased global demand as limitations are removed, unexplored market prospects, a rebound in commodity prices, and an increase in oil prices. 

According to Grand view research, the fastest-growing economies in the region will be Morocco, Kenya, Ghana, Egypt, and South Africa, all of which are expected to expand at or over 4% real GDP in 2021.

Morocco has made huge strides forward in recent years, providing the world with produce after promising agricultural seasons. The country’s predicted growth of 5.19 percent was affected by a successful immunization campaign, accommodating monetary policies, and fiscal stimulants.

Strong financial fundamentals and increased external demand for commodities are projected to help South Africa’s recovery, which is expected to grow at 4.09 percent this year. However, recent protests in the country have delayed this. Egypt’s economy will continue to be driven by private spending growth.

Nigeria, Africa’s largest economy by GDP, is expected to emerge from recession as well, albeit at a slower rate than the rest of Sub-Saharan Africa, at 2.3 percent. Nigeria’s recovery is hampered by increased insecurity, rising food prices, rising debt service payments, and stalling reforms.

Due to a drop in external capital inflows, portfolio investments, and an increase in public debt, many African countries have seen significant currency depreciation. This could make healing more difficult. Governments’ concentration on anti-cyclical easy monetary policies and fiscal stimulus packages, on the other hand, will help the African region’s economic recovery in 2021.

Africa is drawing global investors due to its large resource base and undeveloped market opportunities, in addition to government backing. The United Kingdom recently announced plans to invest $4.5 billion in Africa by 2022, with the goal of creating jobs and accelerating economic growth.

Continued support for health sectors, as well as ongoing economic and monetary support, is critical in dealing with the reappearance of COVID-19 cases. To avoid reversing poverty reduction progress, governments must extend social safety nets and make growth more inclusive and equitable. 

Africa’s policymakers must speed structural transformation through digitalization, industrialisation, and diversification to achieve a faster economic recovery in H2 2021.

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