On Thursday 15 July 2021, Fitch Solutions Country Risk and Industry Research gave an overview of its Sub-Saharan Africa Macroeconomic update. Analysts at Fitch Solutions stated that there had been slow economic growth in the region and that they expected the region to only experience a modest rebound in comparison to the rest of the world.
During their virtual presentation, analysts at Fitch Solutions stated that Southern Africa in particular had continued to underperform significantly in the region. There are a number of factors contributing to Southern Africa’s underperformance and the region’s slow recovery. One of the main factors identified is the region’s relatively slower vaccination rollout. This has meant that the region hasn’t been able to fully open up key sectors which has impacted on growth and spending. Fitch Solutions still expects sub-Saharan Africa to see real GDP growth of 3.3% this year, driven largely by East, Central and West Africa, while Southern Africa lags behind.
Fitch Solutions expected governments to continue the trend of implementing modest 2021/22 budgets that in prior years. South Africa’s expenditure was up by only 2.7% year-on-year in the first quarter of the year, while government spending in Kenya fell by 21.2% year-on-year. The Angolan government’s spending is anticipated to fall from 23% of GDP in 2020 to 21.6% in 2021. The Ghanaian government also released a modest 2021 budget in March, which is expected to help the fiscal deficit narrow from 11.2% of GDP in 2020 to 9.8% this year.
Fitch Solutions analysts highlighted the increased political and social unrest in parts of the region. They referenced the July 2021 unrest in South Africa following the arrest of former President Jacob Zuma which they classified as a net positive. They also highlighted other instances of social unrest such as the Namibian protests, the strikes in Chad after the death of Idriss Deby and strained ethnic relations in the Tigray region in Ethiopia.
Natasha Fuyane is a writer and podcaster. Natasha provides social & political commentary on African issues. Natasha is on twitter @malaikadiva