Africa: what to watch in 2022

Africa suffered an almost fully synchronised economic downturn in 2020, but the region has largely emerged from recession in 2021, and the recovery looks set to accelerate in 2022. A wide range of factors will drive the region forwards next year. However, a similarly long list of issues will weigh heavily on its recovery prospects.

Here are a few of the major trends, issues and events that will shape the trade and investment landscape across Sub Saharan Africa (SSA) in 2022.

• At the top of the list are the lingering effects of the Covid‑19 pandemic and risks associated with future waves of infection, especially given the low vaccination rates across much of the region. Business continuity, investment and revenue-generation prospects could be impaired by successive waves of infection and the ebb and flow of containment measures, including prolonged international travel restrictions.

• On a positive note, travel and tourism could bounce back in 2022 but only in those parts of the continent where vaccination rates are highest—although the recovery will be partial and developments in key markets in Europe and Asia will prove decisive for the sector.

• The commodities boom will extend well into 2022 and provide another year of strong performance by African commodity producers and traders. This bodes well for corporate revenue and share prices among African energy, metals, materials and food producers.

• The digital transformation of African goods and services markets and supply chains will continue to unfold in 2022, and the region will eagerly adopt new technologies, although infrastructure investment coupled with education and training will be crucial to fully leverage the digital revolution.

• Exchange-rate pressures and external debt repayment issues could come to a head in 2022 for some states, which will raise more calls for true debt restructuring rather than debt-service deferrals as well as strategic positioning by international creditors.

• Conflict hotspots will continue to rumble on in 2022. The Sahel region is facing a seemingly unresolvable crisis, with militias and jihadis controlling or presenting a dangerous shadow presence across large swathes of rural areas. Meanwhile, conflict in Ethiopia will present a major source of instability in one of the continent’s most promising countries and across the wider Horn of Africa.