A gradual recovery in some commodity prices and continued reform efforts are part of the new Africa narrative, but risks remain.
An unfortunate combination of a global economy in reverse gear, a collapse in demand, depressed commodity prices, lockdowns, and supply chain disruptions has had a devastating impact on the African economy this year. In addition, we have witnessed sharp declines in investment, tourism, and remittances, and the knock to local economies in the second quarter of this year will be massive. On a continental basis, North Africa and Southern Africa are expected to see the sharpest contractions in 2020, but no region will be left unscathed. Even the fastest-expanding region, East Africa, is expected to contract in 2020, albeit that the marginal -0.2% is less bleak than our earlier projection of -1.8%. The economy of the Franc Zone is likely to contract by 3.0%, while we have pencilled in a contraction of 3.8% for the Central & West Africa region. That said, upside risks to our forecast for the latter region have emerged on signs that less strict lockdown measures and possible weaker compliance may have had less severe economic consequences. (Source: Africa Quarterly Update, September 2020.)