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Africa Outlook 2016

16 March 2016 Lwazi Bam, Deloitte
Lwazi Bam, Chief Executive Officer, Deloitte Africa.

Lwazi Bam, Chief Executive Officer, Deloitte Africa.

Frontier Advisory Deloitte hosted the Africa Outlook 2016 on 21 January where they addressed the economic, governance and political prospects for Africa in 2016, to that they have recently compiled a report titled Africa Outlook 2016.

Looking at Africa’s economic landscape the current commodity price shock has had dramatic negative effects across the continent. With a soft China and hard US, the next few years are going to be challenging for most countries in Africa. Businesses therefore need to be a lot smarter with how they engage in the continent over the next few years.

Welcome and Context (Lwazi Bam, Chief Executive Officer, Deloitte Africa)

Deloitte’s Africa view is informed by a myriad of factors which range from its strategic positioning and century-long presence in 34 countries on the continent. In order to better understand and serve these markets, Deloitte optimises the mix of its highly qualified local talent and global teams.

The firm’s presence on the continent is bullish, non-superficial and grounded on the belief in the long-term prospects of the region. With Sub-Saharan Africa’s (SSA) growth rate forecast to be above that of the global average in 2016, the fundamentals for improved growth and sustained development are still in place for the continent, according to Lwazi Bam.

While difficulties such as corruption, poor infrastructure, currency volatility, terrorism, climate change and the commodity price plunge are evident in both local and global markets, the African continent still remains attractive. The young population, a growing middle class, investments in infrastructure projects, the use of mobile infrastructure and relative political stability (which should not be underestimated), all build the foundations of Africa’s real growth story in 2016 and beyond.

In light of the current headwinds faced not only by South Africa but also other emerging markets, including China, Brazil but also resource-producing African economies, collaborative strategies that identify and position African economies to be more competitive should be the focus for both the private sector and governments. In order to survive and thrive in 2016 and beyond, it is essential for African economies to diversify, especially those that are highly resource-dependent. Global shocks such as the commodity price plunge and the sharp drop in the price of oil are clear signs to this end.

Beyond resource commodity exports, tourism and agriculture are some of the key sectors that African countries need to consider in restructuring their economies.

With the foundation in place for Africa’s growth story, African governments and private sector in the continent’s economies need to work to identify their various unique value propositions in order to be competitively positioned in the global arena. While cognisant of the fact that Africa’s trade infrastructure is still underdeveloped and economies are fragmented along language lines, greater efforts in bilateral and regional integration, all in an effort to come up with an Africa story that is more optimistic and more pronounced, is an important step forward.

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