African economies will continue to experience in 2020 a protracted growth slowdown, particularly the biggest ones such as South Africa (+0%), Algeria (+0.5%) or Nigeria (+1%), according to Allianz Euler Hermes.
In the economic report titled What to expect in 2020-21: Defending growth at all costs, Mr Ludovic Subran, chief economist at Allianz Euler Hermes, says that in these commodity driven economies, a poor ability to reform has exposed the economy to a depletion of key outputs (mining, oil, gas, and power, depending on the economy).
Overall, there is a high likelihood that country risk will deteriorate since subsidies will be increasingly hard to finance in deficit economies adding to difficulties already observed (Algeria, Tunisia, Sudan, and Zimbabwe). In all these economies, debt will increase and become high in some of them (Sudan, Angola, Zambia mainly).
At the same time, long-term growth bonanzas will continue to support growth, such as increasing access to power particularly in West and East Africa.