Commerzbank has released a major new study on trade and economic prospects in Sub-Saharan Africa. The report, ‘Tackling the Headwinds after the Economic Turnaround’, shows that after a promising decade – marked by strong economic growth of around 5% per year, underpinned by booming trade in raw materials and inflows of foreign capital to infrastructure projects – the region’s fortunes have taken a turn for the worse. Since mid-2014, prices for commodities, from oil and copper to gold and coffee, have plunged by 40-60%. This has set off a chain reaction of reduced trade revenues, withdrawal of investment, and rising debt.
Yet Commerzbank’s experts explain that all is not lost. Setting out targeted growth agendas for employment, trade, agriculture and finance, the report notes that great potential remains. It is clear that economic diversification is essential – having enabled Tanzania to grow by 7% annually over the last five years. Additionally, infrastructure investment, coupled with political stability and reforms, can spur development – as Ivory Coast’s impressive 8-10% growth since 2012 highlights. The experts also argue that, if key regional players such as Nigeria can wean themselves off dependence on oil revenues and make adequate fiscal adjustments, such countries can take advantage of large populations to build new industries for the future.
Commerzbank’s study includes insights from the African Development Bank, the Organisation of Economic Cooperation and Development (OECD), and trading companies working ‘on the ground’. This release marks the third edition, since 2012, of a successful series of reports on Sub-Saharan Africa’s trading landscape.
News of the report was covered across the finance and trade press, including World Finance, Yahoo Finance, Mondo Visione, FTSE Global Markets, Global Banking & Finance Review, and Global Trade Magazine.