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Business: 6 important forecasts about African economies in April you should pay attention to

 Business: 6 important forecasts about African economies in April you should pay attention to 

Leading macro intelligence solutions provider, Fitch Solutions, has released new forecasts about the economies of different African countries.
These economic projections are focused on Kenya, Zambia, South Africa, Liberia and Botswana.  

Business: 6 important forecasts about African economies in April you should pay attention to 

We shall now bring you up to speed with the latest projections, focusing on the key takeaways. Note that this is intended to keep stakeholders informed for the purpose of decision making and other necessary actions.  

1. Mechanisation efforts in Africa's agriculture is expected to drive up machinery sales

According to Fitch Solutions, rising food inflation and the need for stable harvests are two of the factors that are driving the adoption of mechanisation by more African farmers. 

To this end, agri machinery imports are expected to increase in 2022, as agritech startups such as Hello Tractor and more large scale farmers across Ethiopia, Algeria and Morocco continue to channel their CapEX budgets towards acquisition of more machineries.

2. Kenya's failure to find commercial crude will leave investors dismayed

Investors who have been waiting earnestly to pump their money in Kenya's oil sector are expected to be hugely disappointed as energy giants like ENI fail to discover any commercially viable crude oil deposits in the country's Lamu Basin and other exploration areas.

Recall that oil explorers have, over the past 10 years, been prospecting possible commercial crude deposits across the East African country but all to no avail. Fitch Solutions said although investors remain keen, their interest are subdued due to the lack of positive outcomes as the explorations continue.  

3. Over in Zambia, consumer spending is expected to recover amid inflation risks

Real household spending in Zambia is expected to record a 4.5% growth in 2022, less than the 6.6% growth that was recorded in 2021. The gradual easing of COVID-19 related restrictions is one of the main factors expected to enable the projected growth.

However, inflationary pressures will weigh negatively on the expected growth. Do note that Zambia's consumer price inflation is expected to average 13.6% in 2022 and will remain elevated due to higher food and rising energy costs exacerbated by the war in Ukraine.  

4. Botswana's growth remains relatively positive, although inflation remains a problem 

Fitch Solutions said it has lowered Botswana's GDP growth expectation from 5.3% to 4.8% due to economic headwinds caused by inflation and the ongoing war in Ukraine. That said, expected growth will be driven by increased diamond prices, household spending and fixed investments, as well as further easing of the country's economy from COVID-19 restrictions.

5. Liberia's mobile money market is expected to witness a boost

Liberian authorities recently licensed eWallie to provide mobile payment services in the West African country. This is expected to boost the country's rather nascent mobile payment market and open up new opportunities.

It should be noted that eWallie is affiliated with Visacard and Mastercard. These affiliations are expected to avail access to global opportunities, thus giving Liberian eCommerce platforms are social media vendors access to compete more effectively on a global stage. 

6. Lastly, South Africa's current account surplus is expected to moderate

South Africa's current account surplus is expected to narrow to 3.3% of the GDP in 2022, from 3.7% in 2021. Fitch Solutions noted that although SA is expected to boost its foreign exchange earnings through increased sales of metals, the gains will be upset by higher costs of imports due to skyrocketing energy costs.

Fitch Solutions also noted that South Africa's primary income deficit will be driven by foreign companies’ repatriation of profits, even as the government continue to service its external debts.

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