Africa’s economy is forecast to grow at a healthy pace of 3.8% in 2021 driven by rising global demand as COVID-19 restrictions are eased
Africa’s fastest-growing economies in 2021 unveiled. Source: pexels.com
GlobalData has found that the fastest-growing economies in the region will be Morocco, Kenya, Ghana, Egypt and South Africa, which are all forecast to register above 4% real GDP growth in 2021.
Africa’s largest economy by GDP, Nigeria, is also forecasted to exit recession, but growth will be at a slower pace than other sub-Saharan African nations at 2.3%. Heightened insecurity, rising food inflation, rising debt service payments and stalled reforms are major roadblocks to Nigeria’s recovery process.
In addition to government support, Africa is attracting global investors due to its vast resource base and untapped market options. For instance, recently the UK pledged to invest $4.5 billion in Africa by 2022, which is expected to create jobs and accelerate economic activities.
According to FDI inflows declined by 20% in the African region in 2020 due to subdued commodity prices and pessimistic investor sentiment amid the COVID-19 pandemic. Nevertheless, untapped markets and structural transformation are likely to speed up the momentum in FDI flows in the coming years.
With an increase in energy demand anticipated, resource-seeking investments may increase in H2 2021. The importance of regional value chains and full implementation of African continental free trade agreements will create new opportunities for African economies.
We’ve reported that despite coronacrisis, employees are saving money for retirement.
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