My Previous Forecast on the African Economy for 2017…#oldpost

The general economic growth for next year will be driven by what happens within the major economies- Nigeria, Ivory Coast, Kenya, Egypt and South Africa because these economies account for more than 50% of the continent’s GDP.

We have therefore assessed these economies and what 2017 would be like for them and the African continent as a whole.


The country may have seen the worst of the storm. 2016 was mired with fall in oil prices- the country’s largest source of revenue, persistent militant attacks consequently reducing oil production and the weakening of the naira against the dollar. All these resulted in high rates of inflation (18.48%), high interest rates (14%) while unemployment rate rose for seventh straight month to 13.9 percent in the third quarter of 2016.

The economy is expected to rebound in 2017, though a slow and fragile recovery. The output cut agreement reached first by OPEC members in late November and on December 10 by OPEC and non-OPEC members should give the economy the needed breather since the deal exempts the country from cutting production.

Also, after numerous consultations and meetings with the Niger Delta militants and a proposed increase in the allocations to the amnesty program, we expect the attacks to subside and allow the country produce to its full capacity. Other issues that will be a source for concern in 2017 will be the exchange rates and tight liquidity conditions. The president and his economic team must get to work tirelessly to improve business confidence.

Ivory Coast

The country has come out of 2016 unscathed from the commodity price slump. The country’s economy hasn’t been hit with the same uncertainty and contraction as other major economies. The country was dubbed to have one of the fastest growing African economy in 2016 due to political stability and government providing a better business climate to lure investors to the country.

The growth in the economy is expected to continue. Earlier this year the President was quoted to have said the country had no preference for either public or private investment, or whether investors come from “China, the Gulf States” or anywhere else. President Ouattara said in a speech to the U.S.-Africa Business Forum in New York in September, “we just want the maximum amount of investment possible.”

On the political front, after the parliamentary elections on December 18, when the 255 seats of the National Assembly was contested. The UN Secretary-General praised the country for the free and fair elections, calling it a “steady march towards lasting peace and stability”.

We therefore anticipate political stability and an attractive destination in 2017, for the world’s biggest producer of Cocoa.


Without any doubt, 2017 will be a decisive year for Kenya, presidential elections are set to hold in August. The Kenyan GDP growth is however predicted to stay strong despite the elections. This will be driven by continued government spending on infrastructure, the energy sector, the construction sector and real estate sector plus also an expected recovery of the tourism sector (after periodic terrorist attacks).

Kenya was ranked as the world’s third most reformed country in the World Bank 2017 Ease of Doing Business report. It jumped 21 places up, signaling the business reforms initiated by the government in 2015 are significantly paying off. Kenya’s improvement was credited to five reforms in the areas of starting a business, obtaining access to electricity, registering property, protecting minority investors and resolving insolvency.

International policies such as the US Fed interest rate hike which will make emerging and frontier markets less attractive on a risk adjusted basis and the presidential elections (which can sometimes be plagued with violence) could cause market uncertainties but the Kenyan economy is expected to stay strong just as it did in 2016.


Coming from the back of the Arab spring and political upheaval that have left the nation’s economy in tatters; severely hurting the tourism sector and foreign direct investments. The government has been working on regaining investor’s confidence in the economy with government backed investments starting to lure in private investments.

The country earlier this year cut subsidies on fuel prices and adopted a value-added sales tax; being part of the requirement to help secure the IMF’s biggest ever loan to a Middle Eastern nation.

On November 3, the Central Bank of Egypt free floated the EGP against a background of dwindling reserves and a widening disparity between official and black market exchange rates. This decision unleashed the biggest inflows of foreign investment into the stock market since the 2011 Arab spring.

Next year would be the last year of President Abdel-Fattah El-Sisi in office before the 2018 elections. The economy in 2017 will vastly depend on what the president does with the grant and investments and also his priorities.

South Africa

Economic growth is expected to rebound in 2017 and strengthen further in 2018, driven by household consumption and investment especially with improvement in electricity production which will boost the manufacturing sector.

However, fiscal policy is under pressure after it barely survived a rating downgrade earlier this month but the economy is still under high scrutiny. Due to the continued increase of government debt and higher borrowing rates in the context of persistent low growth, South Africa has no fiscal space.

With continued political uncertainty (the numerous corruption scandals involving President Jacob Zuma have widely divided the ruling ANC party and calls for his resignation have heightened), weak global demand and a lack of much-needed structural reforms, the economy in 2017 will be riddled with uncertainties for investors. Unless growth accelerates and politicians put the differences aside, unemployment and inequality will remain very high.

Creative and knowledge brand interested in finance and tech.