All the Way Up? Not Quite for African Economic Growth
- Sub-Saharan Africa’s economic growth to hit 3.1% in 2018
- Angola, South Africa, and Nigeria are projected to drive Africa’s growth
The World Bank projects Sub-Saharan Africa will see its economic growth hit 3.1 percent in 2018, continuing its gradual recovery from the steep drop in commodity prices in 2015. What will African countries need to do to ensure they remain on a steady growth path?
Why This Matters: The news that Sub-Saharan Africa’s growth remains on an upward trend is encouraging. Yet, the continent remains vulnerable to external forces like a reduction in metal prices or another drop in commodity prices. “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda,” said World Bank Lead Economist Punam Chuhan-Pole.
The three countries driving a lot of Africa’s growth are Angola, South Africa, and Nigeria. All of these countries have a significant reliance on resources and have developed plans for diversifying their economies. The key will be to see how they execute on those plans in coming years.
Situational Awareness: The World Bank notes electrification is a key lever for Africa driving higher rates of economic growth. US-based startups Fraym and Nithio are providing solutions to address different parts of the electrification problem. Fraym uses GIS-data to provide hyper local insights to clients like power companies figuring out where the customer demand is in a city. Nithio, is a finance platform focused on scaling off-grid solutions to meet needs of the 600 million people across Africa who don’t have access to modern power. Look out for the impact new entrants into Africa’s energy space will have on increasing rates of electrification across the continent.
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