23 Apr Economic Outlook for Key Markets in Sub-Saharan Africa for our Multinational eCommerce Companies
Kind courtesy of a recent Fitch Solutions webinar, here is a high level on key markets across Sub-Saharan Africa for our multinational eCommerce merchants. Some key impacts on the region are as a result of the global slowdown. Mineral and oil prices and demand are down to half previous levels. This will have a negative impact on oil production and there is also a reduction in Chinese investment across the continent. Sub-Saharan Africa has historically enjoyed buoyant demand for tourism related products and services and this supported levels of employment. International travel bans and restrictions on mobility will impact luxury, retail and hospitality and will in particular negatively impact Cape Town, Lagos and Nairobi. Sub-Saharan Africa was already in a precarious economic position prior to COVID 19. Overall growth for the region is forecast to be 0.3% which will lead to a recession in 2020. East Africa will outperform other regions. Kenya, Tanzania and Ethiopia. The Kenyan government is investing in transport and housing, Ethiopia has plans to transform into a manufacturing hub, but is plagued by a downturn in tourism and desert locusts affecting their agriculture. Kenya is experiencing lower exports of coffee and horticultural products, compounded with reduced tourism affecting demand for goods, services and employment. A real GDP of 3.3% is expected. The outlook for Kenya is buoyant. West African growth is expected to be 1.6%. Forecast GDP growth for Nigeria is -0.7% culminating in a recession in 2020. This is mainly as a result of a drop in oil demand and price, limited agricultural capacity, and the high cost of imports using a weakening Naira. Oil demand is expected to pick up late 2020/ 2021. Private consumption is restrained. Rising inflation problems and closing of borders will affect trade. Unemployment of 23% will lead to weaker consumer demand and has risks to social stability. Southern Africa is the sharpest drag on Sub-Saharan Africa growth. Lower regional demand for exports of oil, copper and diamonds will affect South Africa and surrounding countries. Lower commodity prices will cause production cutbacks compounded with Southern Africa's dependence on tourism. Southern African GDP is expected to shrink by 2.9% in 2020. South Africa is expected to have a -1.9% growth rate, mainly as a result of the decline in commodity prices and the travel ban affecting tourism. Business progress was weak as a result of slow action on energy production. Financing of COVID 19 support will be challenging. Click here to contact us for your online payments across Africa Thanks for inspiration and top quality content from Fitch Solutions. Our services include: Nigeria Kenya South Africa
