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Key Themes and Drivers for Africa in 2016

NKC African Economics, a South African company of which the majority shareholder is independent global advisory firm Oxford Economics, recently presented a webinar entitled “Outlook for Africa – Key Themes and Drivers in 2016”. According to NKC African Economics’ website, they evaluate the political and macroeconomic conditions of 30 African countries and use the information obtained to assess each country’s sovereign risk based on a ratings model they developed themselves.

Contrary to the sunny predictions by many other companies, NKC African Economics predicts that 2016 is likely to be a challenging year from a political and macroeconomic perspective. Major themes and drivers of this outlook include low energy prices, widening external imbalances, rising external liabilities and political uncertainties, particularly around the 14 countries in which elections will be held in 2016.

Despite the expected challenges and deterioration in risk scores in some countries, there are some positives in that a number of countries (including Botswana, Mauritius, Morocco and Egypt) have either stable or improved risk scores and a significant real GDP growth is expected in a number of countries. This includes expected growth in excess of 7% in the Ivory Coast, DRC, Rwanda, Tanzania and Ethiopia and expected growth of between 5% and 7% in, among others, Senegal, Mali, Niger, Cameroon, Central African Republic and Mozambique.

Although many risks may be involved, if they are managed effectively, expansion into Africa can lead to major growth in a business. It is therefore still well worth looking into such an expansion.

For more information please contact Adré Greeff

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