The outlook for the African economy in the coming months: between growth and debt.

 Interview by Mr. Riadh BENAISSA

After a phase of strong recession, largely due to the global health crisis, the African continent is preparing, according to the African Development Bank and the French Development Agency, to experience an economic upturn. Despite the unusual context, there are clear signs of a growing recovery.

As Mr. Riadh BENAISSA points out, "with the arrival of Covid-19, Africa has experienced an unprecedented cataclysm. The health impact was violent but not as violent as the one that hit its economy hard, with a recession of almost 3% throughout Africa. Nearly 40 African countries have been hit by this phenomenon, which is exceptional. "

African economists are predicting growth of 3.4%, while the International Monetary Fund is a little more cautious about the level that could be reached (3.1%).

As a connoisseur of this territory and its potential, Mr. Riadh BENAISSA specifies that not all African states have experienced the same type of ordeal, even though he recognizes that all have a certain capacity for growth and resilience.

South Africa, for example," says Mr. BENAISSA, "has been weakened by its high dependence on external demand, particularly in the field of metals. It is a country that was therefore highly exposed to the global economic risks of the health crisis period.

Conversely, for Nigeria, whose GDP is the highest on the African continent, growth declined during the crisis by -4.3%, which is significantly lower than the African average.

But Africa is a continent of great contrasts.

Egypt, for example, with a more diversified economy and a relatively stable domestic the market will have seen little impact from the collapse of tourism over the past year.

However, as Mr. Riadh Benaissa rightly points out, "the economic and health crisis has caused an exceptional increase in African debt, with immediate and direct impacts on budget balances. It is highly likely that fifteen or so African states will increase their indebtedness in the coming months until they are probably over-indebted, which is already affecting six of the 54 African countries. International support and the contribution of private funds could usefully consolidate the beginning of growth in the African economy".

“We must not forget, that international financial aid has become scarcer in recent months, which was to be expected given the context. However, this reduction should not be allowed to last, otherwise, the African economy will be permanently weakened, while real signs of positive progress are appearing. "

This point was noted very early on by the rating agencies and international financial organizations, which pointed out that some states had simply sacrificed certain key areas of their government action, such as education and health.

"Furthermore, Africa has high financing needs with almost $1.2 trillion between 2020 and 2023. Where it is imperative to be vigilant, according to Mr. BENAISSA, is on maintaining the exceptional dynamism of West Africa whose countries have a growth model mainly based on public investment. Therefore, it will be imperative for these countries to give a more important place to the private sector. Oil exporting countries should be able to re-emerge economically fairly quickly. This is particularly true of Algeria and Angola. Economies that are essentially centered on tourism (Morocco or Mauritius, for example) should, according to the most accurate estimates, achieve growth of almost 6% in 2021.

More generally, for the continent as a whole, prioritization of spending will have to remain a strong objective for the months to come. However, Mr. Riadh BENAISSA indicates that "despite the announced and very probable growth, the African debt will undeniably increase and poverty is likely to be more and more widespread.

The relevance of the governance of African states will have to take on a new dimension in the coming months, so that the continent can fully mobilize its potential and not sink in certain aspects of its organization.