Ongoing oil field discoveries in sub-Saharan Africa, coupled with buoyant prices for raw materials and a relatively low dependence on exports to Europe, means sub-Saharan Africa’s GDP will grow by 6% this year, Germany-based bank Commerzbank said in its latest report. Although the region as a whole is still seen as a “latecomer” in its development, and debt relief from international institutions such as the International Monetary Fund (IMF) have been critical in maintaining the region’s economic resilience, Commerzbank also found that government efforts to plug the region’s political and economic gaps have been instrumental in building sub-Saharan Africa’s resilience to international shocks.

In its latest report, which was released at the end of January, Commerzbank found that collective efforts across the region to “leapfrog” development stages by using technology have enabled countries such as Ethiopia, Malawi and Mozambique to successfully tackle electricity bottlenecks and increase energy supply by using alternative renewable energies such as biomass. Also, the decision by governments to implement stability-oriented economic policies, including utilising the profit windfalls from a recent commodities boom, to establish strong current account and public sector surpluses, have improved sub-Saharan Africa’s ability to respond to future economic crises. Thus, while global GDP will expand by just 2% in 2014, according to a communiqué from the G-20 meeting in February, sub-Saharan Africa is expected to outperform this, growing by 6% in the year and by 5% in 2015, according to the IMF.


“The outlook for sustainable economic growth is particularly promising for several countries in western and southern Africa,” Commerzbank asserted in its report. “Furthermore, the growth potential of some dynamically growing economies in east Africa is not to be underestimated. The global sovereign debt crisis had a lesser impact in Africa than in other regions. In addition, the region is not very vulnerable to economic trends in Europe, as only about 20% of exports go to struggling European economies.”

Rapidly urbanising capital cities in sub-Saharan Africa have spawned significant opportunities as the emergence of a large middle class has led to increased demand in the services and construction sector for financial services and high-end real estate. Also positive political progress in countries such as Rwanda, which have worked to tackle corruption and increase democratisation, have, on the whole, improved the region’s business climate. But the region continues to face considerable challenges, including huge income inequalities and low educational attainment.

According to Commerzbank, when benchmarked against other developing regions, sub-Saharan Africa continues to lag in core social and economic indicators. Despite witnessing a large population expansion, underinvestment in the region’s educational facilities coupled with high rates of communicable diseases such as HIV means that sub-Saharan Africa’s demographic dividend may not materialise. Moreover, consistent income inequality means population migration into large capital cities such as Lagos in Nigeria and Nairobi in Kenya has led to a vicious cycle of a large underclass of the uneducated and unemployed population engaging in crime and increasing insecurity in the region’s densely populated metropolises.