In as much as the structure of Africa’s economy has grown over the last decade, it is still being shaped by today’s volatile commodity prices. A continent mainly relying on the exports of natural resources, the economic prospects of the continent have been seen to present mixed fortunes for some countries, and more pressure in others.
Within the West African region, Nigeria is the most populous nation and has the largest economy, but despite existing problems in the oil sector, it is experiencing very slow growth. The recent decision to abandon the current distorted value of the country’s foreign exchange has been embraced with a touch of skepticism among investors as well as economists. It is noteworthy for the sake of the Nigerian economy to diversify from oil dependence, especially at this time, as the nation is trying to attract foreign investment while looking for ways to fix a falling naira.
At the same time, the country is experiencing progress in its attempts to restructure the Ghanaian debt. The country sought debt restructuring this year to enhance its fiscal stability through close cooperation with global creditors. This process still holds with different investors perceiving it as a strenuous process of reconstructing a more stable financial market.
In East Africa, Kenya reflects a stable economy even under the current global challenges. The recent introduction of a digital nomad visa encourages foreign talent and the technology industry in the country. It’s Amid this backdrop that this initiative falls in line with Kenya’s overall plan of establishing the country as an innovation hub and center for digital services within the region.
Tanzania is also on the right track regarding its economic growth and development especially in the attempt to realize trade potential for export led economy. The country’s private sector is on the forefront on developing regional trade relations especially within the East African Community. That intra-regional trade is viewed as a factor that will spur further economic growth and employment generation.
Namibia, one of the African countries with an efficient economy, is still struggling with energy issues. However, recent changes in the energy market present some prospects for development. The National Transmission Company being developed is believed to assist in the energy objectives of the country and maybe help to overcome some, if not most, of the problems relating to power generation and supply that have been a thorn in the side of growth in the economy.
For the African market, the AfCFTA is still going strong throughout the African continent. The recent emphasis on the AfCFTA adjustment fund is evidence of the Parties’ willingness to ensure that no challenges arise, let alone affect the AfCFTA implementation negatively, as well as to guarantee that the benefits of this treaty are shared fairly among all members of the AfCFTA. Since the conclusion of this historic deal, it is probable to foster the formation of the largest free trade zone on the global planet, which holds a cooperative potential for intra-African commerce and structural transformation.
The agricultural sector within most African countries’ economies remains under pressure, and there are opportunities as well. The Food and Agriculture Organization (FAO) reveals that world food commodity prices have recorded their quickest increase in eighteen months. This trend is disadvantageous with regard to food security and inflation in most of the continent’s countries. However, it also has openings for African farmers to scale up their productivity and perhaps gain a bigger market share.
In the field of finance, it is noteworthy that the process of digitalization remains the main impetus for changes in the financial services market, as well as for increasing the accessibility of financial services. Mobile money services are quickly evolving, providing financial services to millions of previously unserved people in Africa. This shift is not only transforming the field of transactions but also offering opportunities for new business initiatives for small businesses.
That being the case, international partnerships are still important as African nations chart this difficult economic course. The interest of international investors in Africa’s economy is demonstrated by recent partnerships, such as the $25 million funding by the British International Investment (BII) targeting the private sector credit to Ecobank Sierra Leone.
Prospects of economic growth in the foreseeable future of Africa shall, therefore, squarely hinge on regional efforts to effectively confront issues like debt burden, physical infrastructure, and human capital. It, therefore, presents itself as endowed with a human resource advantage as a youthful and growing workforce needs concerted effort in the area of education and skills development to unlock the dividend.
This means that as the prices of commodities remain volatile and there is yet more global instability on the horizon for Africa, the continent will be put to the test. However, the African continent has a diverse economy that is in the process of regional integration and committed to innovative systems. Issues in Africa over the next few months will decide whether the continent will come out strong, more diversified, and better placed to foster sustainable economic growth.