The European Business Council for Africa

Date: Tuesday, 18 January 2022 12:30 - 14:30 (London)

The economic recovery for Southern Africa in 2022 hinges on how COVID-19 evolves, vaccination rollouts and the policies that countries adopt. The impact of the pandemic has been severe, causing disruption to countries that depend on tourism, reduction in commodity exports and job losses, in a region that already has high unemployment rates.

However, countries in the region are continuing to weather the storm and Southern Africa is projected to grow by over 2% in 2022 (AfDB, 2021). This will not make up for the estimated 6.3% contraction in 2020, and slow growth in South Africa, the region’s largest economy, has reduced positive externalities for neighbouring countries.

Individual countries in the region have shown a mixed response to the pandemic and are on different growth trajectories. Lack of economic diversity is another vulnerability and commodities play an oversized role in many of the region’s economies, such as Angola, Mozambique and Zambia. Zimbabwe remains the most volatile nation politically and is plagued by hyperinflation. Conversely, Namibia is set to grow by 6.4% in primary industrial output and Angola is expected to come to the end of a long economic recession during 2022, in line with changing monetary and fiscal policies, combined with new oil regulations. Zambia’s change in government was well received by the private sector.

South Africa, the largest economy in the region, has recently held local election where there was a shift in the urban centres of Gauteng. The country experienced what President Ramaphosa called a "watershed moment", when it was announced at the Cop26 Climate Summit that the country would receive $8.5bn (£6.2bn) to help end its reliance on coal. This new deal is particularly relevant for a region that experiences climate impacts that are more severe than the global average.

Although GDP growth is expected for the region in 2022, challenging fiscal and monetary policies, as well as high unemployment and increased levels of corruption will hamper its speed.

Discussion points:

- How can Southern Africa meet the projected growth rates for 2022?

- What impact will a shift to green energy in 2022 have on the region’s economies?

- What effect will the growth rates and political stability have on FDI for the region?


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