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Be Smart About South Africa

Africa’s Sluggish Covid-19 Recovery Shouldn’t Let Investors Lose Sight of Long-term Investment Opportunities

t is an unfortunate yet inescapable reality that Covid-19 will be a key determinant in Africa’s economic growth in the short term. Despite not suffering the same levels of human casualty as elsewhere (less than 5% of the overall deaths from Covid-19 have been in Africa), a largely sluggish vaccine rollout is preventing the continent from kickstarting its recovery as quickly as it might. The patchy vaccine rollout, destined to be a multi-year process, will have varying implications for the growth of certain countries across the continent. Africa has often been characterised by the heterogenous nature of its economies, and these variants are likely to be more pronounced and significant than usual over the next twelve months. The IMF’s recent assessment that Sub-Saharan Africa will be the slowest growing region in 2021, highlights the challenges that parts of the continent are facing. That said, Africa’s GDP is expected to grow by 3.4% in 2021[2], which as Standard Bank’s recent Africa Markets Revealed report concluded, the combination of vaccine distribution and unwinding base effects of central governments will be the spur of the recovery and help stave off an outright recession. Now is an opportune time to stress to investors that the continent’s rapid development in the 21st century has created some robust, resilient regions where opportunities remain aplenty for investors in both the short and long term.

SOURCE: AFRICA.COM

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