AFRICA WILL register mild growth in 2022 (+3.5%) as vaccination rates are expected to remain very low (32% in the overall continent but only 4% in Sub-Saharan Africa).
A new report, Allianz Economic Outlook: Don’t Look Up, which disclosed this, said this is in spite of the fact that Africa was the slowest growing region in 2021.
It gave GDP growth expectations in Senegal as 6.1%; Kenya (5.6%), Ivory Coast (5.5%), Ghana (5.4%), Egypt (4.6%), Mozambique (4.6%), Namibia (3.7%), Morocco (3.3%), Tunisia (3.2%), Gabon (3.2%), Algeria (2.4%), Nigeria (2.3%), Angola (2.2%) and South Africa (2.0%).
According to the report, in 2022, oil exporters such as Angola and Algeria will continue to benefit from the commodity upcycle tailwind. Policy Rates
On the other hand, amid rapidly rising inflation to double digits in most countries, monetary policy rates are expected to increase in Kenya, Nigeria, Ghana, South Africa and Egypt. In an environment of continued sanitary uncertainty, this monetary tightening is expected to put a brake on growth, the report said.
Inflation
In addition to rising energy prices, food inflation has soared to hardly bearable levels in Angola, Ethiopia, Nigeria and Ghana.
Food Insecurity
The food security situation is likely to deteriorate in 2022 in southern and eastern Ethiopia, Kenya and Somalia as a result of adverse climate events. The deteriorating security situation in Ethiopia entails significant risk of spillovers to the region, including migration flows to the Kenyan border.
Debt
Tunisia, Ghana, Mozambique, Kenya and South Africa are hot spots regarding debt sustainability.
Current Account Deficit
Tunisia, Morocco, Egypt and Burkina Faso will see current account deficits only improve slightly in 2022 after deteriorating in 2021.
“Global growth should remain robust but uneven, with rising divergence between advanced and emerging market economies. Our 2022 GDP forecast remains broadly unchanged, with the Eurozone and the US expected to grow by +4.1% and +3.9%, respectively, while growth in China slows to +5.2% due to ongoing disruptions in the real estate sector and the government’s focus on financial stability.
“China’s lowest contribution to global GDP growth since 2015 is likely to have negative spillover effects on emerging markets whose recovery will be shallower compared to past crises,” it noted.
“Global trade is expanding once again above the long-term average but will be disrupted by labor and supply chain bottlenecks, amplified by omicron.
“We expect global trade in volume to grow by +5.4% in 2022 and +4.0% in 2023,” it added.
Allianz has been operating in Africa since 1912 in the following countries Egypt, South Africa through Allianz Global Corporate & Specialty, Nigeria, Ghana, Kenya, Ivory Coast, Madagascar, Morocco, Senegal, Cameroon and Congo,” the report indicated.