Key forecasts about Ghana, 5 other African economies in 2022

So far in 2022, Fitch Solutions has made many projections and released insightful commentaries about different African countries and their economies.

Since the beginning of this year, the leading macro intelligence solutions provider has made key forecasts about Ghana, Angola, Zambia, Botswana, Zimbabwe, Ethiopia, South Africa and others.

We shall now examine these reports, focusing on the key takeaways for the purpose of keeping stakeholders informed.

1. Ghana’s growth expected to moderate in 2022

The West African country’s real GDP will grow by 4.8%, according to Fitch Solutions.

Also, “fixed investment will accelerate as projects delayed by the pan­­demic resume and higher commodity prices boost foreign interest in the country’s abundant natural resources, this will not be sufficient to offset weakness in other components.”

However, the report further noted that rising inflation will affect consumer spending, even as declining oil and cocoa production will impact negatively on exports.

2. Ethiopia’s consumer outlook will also be positive, amid risks

Another report by Fitch Solutions dated March 4th said household spending in Ethiopia would accelerate in 2022, growing by 5.4% up from 2.3% in 2021. However, the expected growth could be hampered by “elevated inflation and the possibility of new Covid-19 variants, which could lead to the re-imposition of Covid-related restrictions.”

3. Political risk in Zambia

The next forecast is about Zambia’s political landscape. In a report dated March 3rd, Fitch noted that the country’s short-term political outlook remains positive, although the long-term outlook is characterised by risks.

On the positive side, the Zambian Government is expected to implement a number of business-friendly reforms in the coming quarters. Also, Fitch Solutions said there would be limited possibility of civil unrest in the short term, even as the country’s security profile remains strong.

However, civil unrest are expected in the long-term in protests against the government’s “painful fiscal reforms” and economic diversification efforts.

4. Bilateral relations between Botswana and Zimbabwe will benefit local drug manufacturers

As bilateral relations between Botswana and Zimbabwe continues to strengthen, local generic drug manufacturers are poised to benefit the most. Already, both countries have signed at least 20 memoranda of understanding (MoUs), among which was an MoU on healthcare.

According to Fitch Solutions, “the two parties agree that there is a need to develop their local pharmaceutical industries and strengthen their cooperation on this front.” This will spur activities in the pharmaceutical sector, thus benefiting drug makers.

5. South Africa’s low healthcare budget will limit opportunities for some

According to Fitch Solutions, South Africa’s healthcare allocation is on a downward trajectory, as COVID-19 fears wane. The country’s latest budget for fiscal year 2022 show that healthcare only received a provision of $16.4 billion. To this end, some provisions have been curtailed, including grants for HIV, tuberculosis, malaria and community outreach.

The report by Fitch Solutions noted that “reduced spending will therefore mean reduced revenues and opportunities for drugmakers”.

6. Consumer spending in Angola

In a report dated March 2nd, Fitch Solutions projected that household spending in Angola would grow by 3.4% in 2022. This would be “supported by monetary stimulus, disinflation and easing Covid-19 curbs,” the report said.

Note that the expected growth in Angola’s consumer spending is in line with the anticipated increase in the country’s real GDP; from 0.6% growth in 2021 to 2.7% growth in 2022.

Source: norvanreports