Sub-Saharan Africa: A Rising Economic Frontier?

Delivery

This report comes in PPT.

Key findings

A rising economic frontier with uneven growth

Sub-Saharan Africa is a rising frontier, but economic growth will remain uneven across the region as countries will remain at varying stages of development. While GDP is forecast to more than double in real terms over 2022-2040 in Sub-Saharan Africa, most of the progress will arise from East Africa which is set to become one of the fastest-growing regions in the world.

Sub-Saharan Africa remains a small economy despite its large population

In 2022, Sub-Saharan Africa accounted for 15% of the global population, yet its economic footprint was lower, generating just 2% of GDP. An overly large dependence on less productive sectors of the economy, especially agriculture, inhibits economic growth.

Critical challenges are holding back progress

Sub-Saharan Africa remains mired in corruption, macroeconomic instability and poor infrastructure, among other challenges. This greatly reduces the region’s ability to progress and improve the standard of living of its population. In 2022, more than half of the urban population was living in slums, while poverty remains rife.

However, the region does present significant, opportunities

Sub-Saharan Africa presents numerous opportunities which include the region’s digital economy, green economy, natural resources, consumption potential and improving value chains. Its large, young and growing urban population will supplement the region’s labour force and will help it capitalise on its large demographic dividend. 

Commercial entry strategies require careful due diligence

Sub-Saharan Africa remains a heterogenous economy with countries at different stages of development. Yet a uniting factor is that many are endowed with relatively weak economic environments. Commercial strategies will require careful due diligence, including prioritising economic stability over high growth and building a diverse portfolio to mitigate risk.