Africa in 2023 The coming year in the coming continent.

Joel Popoola, the Chair IoD Africa Group, examines the economic prospects of the continent in 2023.

Between the ongoing economic impact of Covid, the Russian invasion of Ukraine, global slowdown and raging inflation the world’s economy suffered a good deal of disruption in 2022 – and Africa was no exception. But what does 2023 hold in store for the world’s coming continent?

Tellingly, this could be the year that some of Africa’s underestimated economies move centre stage – while traditional powerhouses continue to struggle.

As we start the year, all eyes are on my own home nation of Nigeria and our February 24th presidential election.

As an unrepentant and unfashionable optimist, I hope this election is the one which leads to the structural reforms Nigeria needs to unleash the entrepreneurial enthusiasm of its youthful population, and the investment in the infrastructure the country needs to plot a path to becoming the force in the global economy we should already be based on our population alone.

Even though Rishi Sunak would bite your hand off for the IMF’s prediction of 3.2% GDP growth in Nigeria this year, there is no doubt that insecurity, creaking infrastructure, and currency issues continue to hold the nation back. Could this presidential election be the one which puts Nigeria back on the right track?

If anything, things are even worse in one of the continent’s other established economies, South Africa, when external economic shocks are being exacerbated by political instability and insecure power supplies.

With 88% of South Africa’s electricity supplied by coal-fired power stations however, investment in clean energy could go a long way towards addressing both its economic and energy strife.

As one analyst puts it: “We used to have manufacturing capability, but government policy was unclear on renewables and manufacturers left the country, taking with them much of that capability. There is now a huge opportunity to reignite that.”

There is a similar story in Egypt, where the currency and foreign investment took quite a hit at the start of 2022. But the nation ended the COP27 climate conference in Sharm El-Sheikh which saw the government strike several deals aimed at accelerating its clean energy transition. These, and IMF funding, see Egypt predicted to achieve GDP growth of 6.6% in 2023.

It could be other nations which drive continental growth – for example Senegal’s expanded mining and natural gas sectors and Kenya’s “hustler nation” strategy of harnessing the economic potential of SMEs. As a result, the World Bank recently predicted that Senegalese economy will grow by 8% this year – and 10.5% the year after.

Whilst less pronounced, Cameroon’s growth potential in the eyes of the World Bank is notable, with increasing investment and private consumption leading to sustained growth above 4% in the coming years.

Of course, good governance and sensible investment is key for the African nation’s predicted to buck the downward economic trend in 2023. It was not so long ago that Ghana was experiencing double digit economic growth and being hailed as Africa’s “shining star” by the World Bank.

Even as one of the world’s biggest exporters of reliable commodities such as gold and cocoa, Ghana is now experiencing inflation of an eye-watering 50.3%. Many observers feel the nation missed the opportunity of this oil-led boom to diversify its economy. And the nation is now seeing the result.

In recent years, Africa’s development has often been underwritten by Chinese and Russian money – with those nations distracted there is certainly a window of opportunity for delivery partners from other nations.

This is certainly the bet the United States is making, with the Biden administration pledging Africa $55bn of investment in the next three years at a December US-Africa leadership Summit in Washington.

These investments include $500m aimed at improving ports in Benin, and $350m to be spent on boosting Africa’s digital economy. The President stated that America is “all in” with Africa –and despite some ominous headline figures, there is good evidence to support this strategic decision.

Efforts to build a stronger business ecosystem around anchor investments like these could provide a major economic boost to the continent – and British businesses could be the ones to benefit.

This article has been written by Joel Popoola – Chair of the Institute of Directors Africa Group, which aims to stimulate business opportunities, increase networking, and grow awareness of British businesses in Africa – and African businesses in Britain.

Joel is also a software entrepreneur, and Chief Executive of political engagement app Rate Your Leader.

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