African economies are bouncing back from coronavirus recession
Africa’s economy is starting to recover, despite being in the midst of a pandemic, the recently published Africa Risk-Reward Index 2021 shows.
An economic bounce from 2020 is well underway and it is higher than figures put out earlier in the year, thanks in part to an increased supply of Covid-19 vaccines, a recently published index shows.
Control Risks and Oxford Economics Africa analysts, who jointly produced the index, project that the continent’s economy will grow by 4.45% in 2021, citing reduced Covid-19 caseloads despite slow vaccine rollout.
Not even the third wave of Covid-19 including an outbreak of the more deadly “Delta” variant has stopped African economies from growing, the index results show.
“Economies are starting to recover and the virus is no longer an all-consuming issue infringing on every area of the investment landscape,” says the index.
By end of August, 2.4% of Africa’s population had been fully vaccinated with 4.5% having received their first dose. According to the WHO, Africa had received 177 million vaccine doses by 21 September 2021.
A far higher percentage of the population is expected to have access to vaccines by year-end, as the rollout of a mass-vaccination programme increases efficiencies and as more African countries join the COVAX facility, which seeks to ensure equitable access to safe and effective Covid-19 vaccines globally.
While the Oxford Economics growth forecast for Africa is below the 6% projected for the rest of the world, it is higher than the 3.4% projected earlier in the year by the AfDB.
The continent’s economy contracted 2.1% in 2020, after the deadly virus that hit world economies hard. However, strong economic recovery is seen in five African countries that recorded the highest rise in reward scores in the index.
“We have seen some pretty significant improvements from previous reports, largely due to economic recovery that we are seeing taking shape. The biggest improvements have been in countries where there has been strong growth, a key driver behind the overall reward score performance,” said Head of Macro at Oxford Economics Africa, Jacques Nel.
Botswana recorded the highest increase in reward score on the index, followed by Zimbabwe, South Africa, Egypt and Namibia.
According to Nel, South Africa, Namibia and Botswana had the largest economic contractions last year. A recovery in all three countries was expected as a result of stimulus spending.
Kenya, whose score on the index rose by only a single point, is also listed among countries reporting strong recovery in economic growth though it did not perform badly in the 2020 score, maintaining steady growth.
Both Kenya and South Africa rebased their economies in the second half of 2021, improving their standings.
Kenya, Tanzania and Rwanda in East Africa are projected to sustain their economic growth momentum, while in West Africa, Ghana and Côte d’Ivoire have been tipped to record strong economic growth later in the year. Nigeria, Tunisia and Angola also recorded improved scores as economic recovery spread across Africa.