ECIC AR 2024 9TH

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

Integrated Report 2024

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

I

R

T

P

A

O

R

Regional Outlook Africa’s economic growth rate is projected to rise from 2.6% in 2023 to 3.4% in 2024 and 3.8% in 2025, partially driven by slowing inflation, which is likely to increase consumption demand. The growth momentum will be strongest in East African countries given their diversified production structures, while other countries on the continent battle with declining commodity prices. Risks to this regional economic outlook include political instability and escalating violent conflicts, disruptions to global or local trade and production, a sharper than anticipated global economic slowdown, adverse weather events, and increased sovereign debt defaults. Intensifying droughts and associated diseases caused by climate change in the Horn of Africa and Southern Africa are increasing food insecurity and worsening fiscal space. Vulnerability to climate change and severe weather patterns, like the El Niño, will require resilience and climate support on the continent. According to the World Economic Forum, environmental issues will top global risks, in the next decade. The long-term impacts and spill over effects of environmental issues can no longer

be ignored and go beyond the agricultural sector but also impact hydroelectric power capacity. This has the potential to disrupt supply chains of several commodities in extractive industries reliant on such power supplies. Hence the renewed focus on the green economy and climate financing. While the Corporation keeps abreast of such developments as having observer status in the Organization for Economic Co-operation and Development (OECD), it is independent in the implementation thereof. In that regard, ECIC has also strengthened environmental monitoring, reporting and due diligence. Public debt on the continent is expected to contract from an average of 61% of GDP in 2023 to 57% in 2024. However, over 50% of African governments are experiencing challenges related to external liquidity, unsustainable debt burdens, or are in the process of restructuring or reprofiling their debts. Debt service obligations have increased as these governments are increasingly subjected to market financing and loans from governments outside the Paris Club. While there has been a gradual decline in sovereign spreads since their peak in May 2023, the cost of external borrowing has risen compared to the pre-pandemic period.

COUNTRY

EXTERNAL DEBT TO GDP 2023 (%)

KEY EXPORT COMMODITIES

CRUDE OIL

ANGOLA

64.2

COTTON, OIL SEEDS CRUDE OIL, COPPER

BENIN

37.6

CONGO BRAZZAVILLE

37,1

CRUDE OIL

CHAD

29.6

COPPER, COBALT

DRC

13.7

COFFEE, OILY SEEDS, GOLD

ETHIOPIA

30,9

GOLD, COCOA, OIL

GHANA

49.1

TEA, COFFEE, SPICES

KENYA

40.5

TOBACCO, TEA, SUGAR

MALAWI

59.0

COAL, ALUMINIUM, GAS

MOZAMBIQUE

102.1

Legend

CRUDE OIL

NIGERIA

26.9

Low Moderate High Distress

GOLD, TOBACCO, NUTS

TANZANIA

27,9

GOLD, COFFEE

UGANDA

32,3

COPPER, GOLD

ZAMBIA

50.6

GOLD, TOBACCO

ZIMBABWE

68.1

2

Source: IMF Regional Economic Outlook, 2023; S&P Global, 2023

Figure 9: External Debt to GDP

In the first half of 2024, Ghana announced that it had reached an agreement with the country’s Official Creditor Committee to restructure its external debt with bilateral lenders while Zambia finalised its debt restructuring. Below are updates for key selected countries.

YOUR EXPORT RISK PARTNER

45