The European Business Council for Africa

Thursday, 26 January 2023 12:00 13:00

Online

Southern Africa was the hardest hit sub-region during the COVID-19 pandemic causing regional GDP growth to contract significantly. Thus, these diverse economies are entering 2023 at various stages of economic recovery and development. A central theme for this year will be how countries in the sub-region can become less reliant on fossil fuels and investment opportunities in the renewable energy sector.

South Africa is the largest emitter of greenhouse gas annually owing to its substantial coal industry but will be performing an increasingly delicate balancing act between transitioning to a green economy while trying to ensure job security for those working with fossil fuels. This shift has the potential to achieve decarbonisation commitments at a quicker pace while promoting sustainable development. Increased investments in enabling infrastructure, particularly in Namibia’s high-profile green hydrogen projects, is set to support economic diversification as the Government pursues its plans to boost value-added processing and achieve export-driven growth. Equally significant is the discovery of liquified natural gas (LNG) in Mozambique. While LNG has been identified as the “cleanest” fossil fuel it is one, nevertheless.

African countries are being hit the hardest by disruptions in global supply chains as an upshot of the Russia-Ukraine conflict, increasing the need to diversify exports. In Zambia where food accounts for 50% of household consumer price baskets, higher prices for foodstuffs will significantly hurt livelihoods of a sizeable portion of the population. Moreover, considering the move toward clean energy technologies there is a growing appetite for developments in Agri-Tech industries in Southern African countries such as Namibia to develop greater agricultural productivity. The reliance on European grain imports is only highlighting the necessity for African countries to become much more self-sufficient and to engage in intra-African trade to a greater extent, the African Continental Free Trade Area has the potential to deepen this. Low vaccination rates against COVID-19 in South Africa, Zambia, Botswana, Angola, and Lesotho will continue to constrain economic recovery.

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