Africa Risk-Reward Index shows megaprojects & tech growth

The ninth edition of the Africa Risk-Reward Index reveals a shifting investment landscape in major African markets, providing a longer-term outlook on key trends influencing investment in these economies. Oxford Economics Africa states that Africa is currently at an inflection point, signifying a crucial moment of change and transformation. Jacques Nel, the Head of Africa Macro at Oxford Economics Africa, recently joined CNBC Africa to discuss the findings of the latest Index. Nel highlighted the significant political shifts occurring across the continent, noting recent election outcomes in various countries as pivotal moments. He pointed out that countries like South Africa, Senegal, and Kenya have experienced notable changes, with younger politicians gaining power and older regimes being voted out. These changes reflect a growing demand for accountability and effectiveness from political leaders, especially among the continent's increasingly educated and youthful populations. The evolving demographics and educational levels in many African nations have contributed to a wave of informed and demanding citizens. The insufficient job creation and lack of impactful growth over the past decades have fueled frustrations among the populace. Nel emphasized that social media and increased connectivity have played a crucial role in mobilizing and amplifying voices calling for change. Governments across Africa are facing challenges in addressing the grievances of their populations while implementing necessary macroeconomic reforms. Nel highlighted the delicate balance required, as measures like subsidy cuts and tax increases may lead to short-term hardships for citizens. However, accompanying policies aimed at targeted social support and wage increases demonstrate efforts to alleviate the immediate impact on households. While some governments have been able to navigate these challenges effectively, others have faced backlash from their population. In countries like Kenya, proposed tax measures sparked public outcry, highlighting the tensions between economic reforms and social welfare promises made during elections. However, Nel remains optimistic about the ability of leaders like William Ruto in Kenya to steer the fiscal ship in the right direction, albeit with potential delays in the desired consolidation. The Africa Risk-Reward Index also delves into the specific changes in country scores over the past year. Mozambique emerged as a positive mover due to advancements in its LNG sector, poised to revolutionize the economy. In contrast, Senegal experienced a weakening in its score attributed to the moderating benefits of its natural gas boom. Despite this, Senegal remains a top performer with a promising economic growth outlook and increasing foreign investor interest. Overall, the Index underscores a critical juncture in African politics, marked by a growing emphasis on youth inclusion, governmental accountability, and economic reform. As the continent navigates these transformative developments, the path towards sustainable growth and stability will require proactive and adaptive leadership to address the evolving demands of its citizens.