Absa's 2021 outlook for SSA economies

Sub-Saharan Africa's economy has faced significant challenges in 2020 due to the impact of the COVID-19 pandemic. The first half of the year saw a sharp decline in economic growth, particularly in the second quarter. However, as countries began to reopen their economies in the second half of the year, a fragile and uneven recovery started to emerge. Ridle Markus, Africa Strategist at Absa Corporate & Investment Banking, highlighted some key trends and projections for the region in 2021. One of the main regional nodes showing promising signs of recovery is Mauritius, with an expected decline in economic activity of 13.7% in 2020, followed by a potential growth of close to 9% in 2021. However, Markus cautioned that while higher growth rates may be on the horizon, there are still underlying vulnerabilities in the system. The recovery in Mauritius is likely to be driven by improvements in tourism markets, manufacturing, and other economic activities. Additionally, the recent uptick in commodity prices has raised hopes for a more robust recovery in the region. Countries like South Africa have benefited from higher commodity prices, but Markus warned against overly optimistic projections, noting that the sustainability of this trend remains uncertain. The Chinese economy's performance will play a critical role in shaping commodity prices in 2021. While a moderate recovery in commodity prices is expected, it is essential for policymakers to provide robust fiscal and monetary support to sustain economic growth. Absa anticipates a growth rate of around 3% for the region in 2021, contingent upon favorable policy measures and external economic factors.