Nigeria, the largest economy on the African continent, is expected to contribute significantly to Africa’s economic expansion -at an average real rate of 4.8 percent per annum between 2015 and 2020, contributing over 25 percent to the continent’s forecast growth in this timeframe.
Growth in Africa is expected to average over 4 percent over the next five years, but is still heavily commodity-dependent, according to ICAEW (The Institute of Chartered Accountants in England and Wales). In its report Economic Insight: Africa Q1 2016, the accountancy and finance body points to good news for African economies, but warns that manufacturing still accounts for a small share of output and says the old model of exporting raw materials is becoming unsustainable.
In the East Africa Region Kenya’s economy should to expand by around 6% during the 2017 to 2020 period.
Regional Director, ICAEW Middle East, Africa and South Asia Michael Armstrong said: “Africa is the most commodity-dependent continent on earth. Africa’s economies increasingly need to create a hospitable environment for companies in the manufacturing and services sectors to drive growth, as the old models of growth driven by exports of raw materials are out-dated.
The East African region is embracing the use of renewable energy to leapfrog older power generation technologies, while also reducing the need to extend the national energy grid to remote villages,” said Armstrong.
The report notes that Kenya, for instance, is now ranked the seventh highest producer of geothermal power globally after it recently unveiled the second phase of the Olkaria geothermal plant. Olkaria is now the biggest single- turbine geothermal plant in the world.
Tom Rogers, Associate Director, Macro Consulting at Oxford Economics, said: “A clear plan for preventing fiscal slippage will be needed to underpin confidence in public finances and economic stability. The government’s recognition of these economic concerns will be needed to address these issues and instill some confidence in the country’s economic outlook.”
According to the ICAEW Economic Insight: Africa report Innovation in financial services technology – known as as FinTech – has erupted as a primary global investment opportunity and has recorded rapid growth over the past five years as technological innovation allowed digitally active consumers to streamline and improve on traditional banking services.
Hope Moses-Ashike
