The Sub-Saharan Africa outlook in 2022 shows a variety of recovery timelines. Many small- and medium-sized markets that escaped recession in 2020 will continue to deliver rapid growth through 2022 thanks to diversified export portfolios, pro-business reforms, and improving conditions for consumers. In contrast, weakness—mostly stemming from deep-rooted structural economic problems, social unrest and political tensions, protectionist trade policy, and deteriorating public finances—will linger in larger markets, curtailing their growth prospects.
Risks to Forecast
Tight public finances across SSA could see sharper-than-expected tax hikes and spending cuts, especially if commodity prices fall faster than expected in the beginning of 2022. Chronic and escalating unrest poses substantial risks to growth in Ethiopia and Mozambique. Post-election political tensions in Kenya could disrupt activity in late 2022, and repeated COVID-19 waves could further dampen prospects for a tourism recovery in South Africa.
Businesses cannot assume demand will recover evenly across markets and customer segments. Executives should prepare for lingering weakness in demand conditions—and rising competitive pressures as companies fight for greater share of customer wallet—in economies facing fragile recoveries. In markets with more upbeat growth prospects, businesses will need to adapt to difficulties traveling to SSA, which has implications for the way they work with local partners, on whom they will remain much more dependent for marketing, business development, and sales than in other regions.
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