Afreximbank on Africa’s macroeconomic outlook

The global economic landscape has been fraught with challenges, from the aftermath of the pandemic to geopolitical tensions and the war in Ukraine. These factors have left a dent on the global economy, resulting in sluggish growth at a global level, as highlighted by Sampawende Jules Tapsoba, Deputy Chief Economist at Afreximbank. Despite these challenges, African economies are demonstrating resilience and promising growth prospects, outpacing the global average. Tapsoba sheds light on the macroeconomic outlook for Africa and the investment opportunities that lie ahead. In a recent interview with CNBC Africa, Tapsoba painted a picture of cautious optimism for African economies amid a backdrop of global uncertainties. He pointed out that while the world is grappling with multiple shocks including COVID-19, geopolitical tensions, and monetary policy tightening, Africa is on a trajectory of growth. Tapsoba projected that African GDP is set to expand by 3.8% in 2024 and 4.2% in 2025, surpassing the global growth rate. Key Points: 1. Resilience Amid Global Challenges: Despite the turbulent global economic environment characterized by high inflation, interest rates, geopolitical tensions, and climate change shocks, African economies are holding steady. Tapsoba emphasized the continent's population of 1.46 billion and a GDP of $3.1 trillion, highlighting Africa's growing significance in the global economic landscape. 2. Investment Opportunities in Africa: Tapsoba highlighted the need to distinguish external shocks from the internal progress being made by African economies. He underscored the importance of sound macroeconomic policies, investment opportunities, and the vast potential for growth in infrastructure, human capital, and connectivity. Tapsoba urged investors to look beyond the challenges and focus on the dynamic prospects that Africa offers. 3. Focus on Intra-African Trade: Tapsoba emphasized the importance of intra-African trade as a key driver of growth. While acknowledging the slow progress of the African Continental Free Trade Area (AfCFTA) implementation, he highlighted recent growth in intra-African trade and the potential for increased economic integration among African nations. As Africa navigates the challenges of debt servicing and external vulnerabilities, Tapsoba emphasized the need for a strategic approach to economic management. He noted that some African nations are grappling with heavy external debts, requiring a delicate balance between managing debt service and promoting economic growth. Despite these challenges, Tapsoba expressed optimism about Africa's economic prospects and the opportunities for sustainable growth. Quote: Tapsoba succinctly summarized the key theme of the interview, stating, 'Africa is back on the capital market, on the investment side.' This statement encapsulates the positive outlook for African economies and the growing interest from investors in the continent's potential for economic advancement.