Africa's economic growth weak but recovery in sight

Africa's economic growth has been weak, but a recovery seems to be on the horizon. The continent's debt load remains high, largely due to elevated global interest rates; however, there are positive tailwinds as energy prices and inflation start to ease. In a recent interview with CNBC Africa, Charlie Robertson, Global Chief Economist at Renaissance Capital, provided insights into the factors shaping Africa's economic future. Robertson highlighted that positive tailwinds, such as falling interest rates and oil prices, are benefiting Eastern Africa by keeping transportation costs down and containing food prices. To sustain long-term growth, he emphasized the need for governments to prioritize investment in human capital and healthcare. Education spending, in particular, plays a crucial role in lifting countries out of poverty by fostering a skilled workforce. Additionally, investments in health, especially child and maternal healthcare, can improve demographics and savings. Robertson underscored the importance of reassuring markets and investors to bring down interest rates and inflation, which can lower the burden of high interest payments for many African countries. In light of Kenya's economic challenges, including a substantial budget deficit and protests against tax hikes, Robertson emphasized the significance of fiscal prudence and IMF's support in restoring investor confidence. Addressing Kenya's debt challenges, Robertson suggested focusing on attracting equity investors to supplement savings and stimulate economic growth. The economist also discussed the impact of global events like Russia's invasion of Ukraine on Africa's access to development finance and highlighted the need for diversified funding sources to support the continent's economic recovery. Robertson further addressed the growing emphasis on climate finance, noting the challenges faced by lower-income countries in securing financing for reliable baseload power. While advocating for climate change mitigation, Robertson stressed the importance of addressing all aspects of development financing to meet the diverse needs of nations like Kenya. He acknowledged the efforts of international institutions like the IMF and World Bank in providing support but called for increased financing and collaboration with emerging economies like China to meet Africa's funding requirements. Despite the current challenges, Robertson expressed optimism that a shift in global monetary policies, such as lower Fed interest rates, could attract private capital back to Africa and bolster the continent's economic prospects.