Investors update: Africa’s economic growth to outpace global forecast

Africa’s economic growth to outpace global forecast

Highlights

• Africa is set to outperform the rest of the world in economic growth over the next two years, with real gross domestic product (GDP) averaging around 4% in 2023 and 2024.
• This is higher than projected global averages of 2.7% and 3.2%, the African Development Bank Group said in Africa’s Macroeconomic Performance and Outlook report for the region.
• The report shows that all the continent’s five regions remain resilient with a steady outlook for the medium-term, despite facing significant headwinds due to global socio-economic shocks.

Source: AfDB

Our Takeaway

Buoyed by revenues and investment related to large natural gas projects, Mozambique and Senegal will rank among Africa’s fastest-growing economies. Senegal is projected to see its economy grow 10.2% in 2023 with Mozambique expanding 8% next year. However, Africa’s two biggest economies – Nigeria and South Africa – will remain a drag on continental growth, with projections of 3.1% and 1.4% respectively for this year. These growth rates are slightly higher than International Monetary Fund forecasts.

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Senegal vaccine institute bags $50m to boost capacity

Highlights

• The Coalition for Epidemic Preparedness (CEPI) will invest up to $50 million over 10 years to help Senegal’s Institut Pasteur expand Africa’s ability to produce vaccines at scale.
• The deal is expected to help Africa take charge of its own health security while reserving the capacity to produce vaccines specifically for Global South countries during future disease outbreaks.
• The funds, which will initially include up to $15 million over three years, will support the development of the institute’s manufacturing facilities for routine and outbreak vaccinations.

Source: Fox News

Our Takeaway

At the outset of the COVID-19 pandemic, Africa, like other poorer regions, was left without adequate vaccine supplies, highlighting the need to develop its own production. Bolstering local capacity should serve as a major boost to the health prospects of a continent that has been battered for decades by the burden of several diseases and pandemics such as Covid-19, but with very limited capacity to produce its own medicines and vaccines. Africa imports more than 70% of all the medicines it needs, gulping $14 billion per year.

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Emerging market shares record fourth week of gains

Highlights

• Emerging market shares rose early on Friday and were on course for their fourth straight week of gains.
• Chinese stocks rallied ahead of the Lunar New year holidays, with Hong Kong’s benchmark index.HIS up 1.8% while Chinese blue chips CSI300 rose 0.6%.
• Elsewhere, South Africa’s top 40 index JTOPI rose 0.4% to hit new highs. MSCI’s index of emerging market shares MSCIF was up 0.8%, and on track to gain about 0.6% this week.

Source: CNBC Africa

Our Takeaway

The positive sentiments seen in emerging market equities are driven by optimism around China lifting some Covid curbs and hopes for smaller interest rate hikes in the US. Analysts say China’s reopening will shape the markets this year as EM bond flows accelerate to their largest level since June 2021, per JPMorgan data. Flows to EM bonds and equities stood at $3.8 billion and $12.9 billion respectively from the beginning of the year.