ABSA predicts slower sub-saharan Africa economic growth

ABSA Group has predicted a slower economic growth in sub-saharan Africa in 2021 compared to 2019 before the outbreak of the Novel coronavirus.

And the Bank has observed that despite the low infection and fatalities of the Coronavirus on the African continent, the pandemic is having a sizable impact on the region’s economies.

Meanwhile, Absa Zambia Plc has predicted that the Kwacha will rebound in the third quarter of 2021 given the current economic fundamentals and high demand of the dollars in the importation of commodities.

Absa Group chief economist

Jeff Gable said despite the African continent recording low infections and fatalities compared to other continents, restrictions on movement has largely affected countries on the continent.

Gable said tourism-dependent economies experienced a sharp contraction due to exceptionally weak international tourism which severely impacted the service sector.

The chief economist pointed out that the restrictions in the movement imposed in most countries have affected tourist, service experts and investors movements.

He has observed that despite some countries on the continent relaxing the travel restrictions, some other countries across the world are still observing restrictions on movements.

He was speaking at the 2020 virtula absa data journalism masterclass in Lusaka.

Meanwhile, Mr. Gable said the African economies are expected to rebound in 2021 but at a slower rate compared to 2019 before the outbreak of the coronavirus due to tourism which is not expected to rebound immediately.

Mr. Gable added that debt, particularly in the public sector, is increasingly becoming risky owing to the number of countries in debt distress.

He explained that the number of countries in debt distress or high risk has increased from 8 to 20 countries in the last 5 years.

And ABSA Zambia Head of Global Markets Stanley Tamele has predicted that the Kwacha is likely to rebound in the third quarter of 2021 given the current economic fundamentals and high demand of the dollars in the importation of essential commodities.

Mr. Tamele explained that the high demand for the dollar in the energy and agriculture for the importation of crude and farming inputs respectively is adding more pressure on the local currency.

He further noted that the decline in export of copper, the negative impact on the Small Medium Enterprises such tourism and travel had also impacted negatively on the local currency.

He said the Kwacha is expected to have some relief in the third quarter of 2020.