Economic rebound in Nigeria, South Africa, gas investment, fintech innovation to drive growth in Africa in 2018 – Report

Economic rebound in sub-Saharan Africa heavyweights, Nigeria and South Africa, and ongoing growth in top performers, Ethiopia, Côte d’Ivoire and (more recently) Ghana, and fintech innovation, as well as a growing investment in gas resources, has been identified as key trends to grow the region’s economy in 2018.

The 2017 Ecobank Research’s Fixed Income, Currency and Commodities (FICC) Guidebook, indicated a positive outlook for the continent, just as it forecasts a rise in oil production, growing gas investments and increased fintech innovation as three key trends to take hold during the next 12 months.

The report, which provides expert knowledge and analysis on African markets for investors and businesses, was launched Thursday.

It specifically noted that growth will be driven by a rise in oil production (notably in Ghana, Republic of Congo, Nigeria, and Angola), a strengthening infrastructure investment across West and East Africa, and an improved weather conditions, which bode well for crops.

“Strengthening economic activity, plus a moderate improvement in oil and mineral prices, will help narrow the current account deficit, but pressure on SSA currencies will remain,” it said.

The Ecobank research analysts also indicated that emerging trend points to West Africa’s gas sector becoming a hive of activity in 2018 from Senegal to Angola, with the development of gas pipelines, floating liquefied natural gas (FLNG) platforms and major gas field projects.

“Governments in the Gulf of Guinea and across West Africa have ramped up efforts to secure gas supply in order to boost domestic power generation and diversify their revenues away from crude oil.

“Deregulating the gas market and allowing market-driven gas prices will be key to unlocking further gas infrastructure investment across the region,” the researchers said.

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The report equally suggests Fintech innovation in Africa would pick up speed in 2018 buoyed by a new generation of Africans who are ‘digital natives’.

“The proliferation of tech hubs across Africa (notably in South Africa, Kenya, Rwanda, Nigeria, Ghana and Côte d’Ivoire) will nurture the next wave of African start-ups and help connect them with investors.

The explosion in mobile phone usage is driving digital innovation in SSA, which enables African consumers to leapfrog existing business models and technologies.”

It noted that African Fintech firms are increasingly driving this innovation, deploying digital tools to build credit profiles for the previously ‘unbankable’, providing electricity to rural households that were previously off the grid, even using artificial intelligence to diagnose health problems remotely.

“The digital world moves apace, and so must we. The AfricaFICC website is a key way that we can deliver our regional market analysis and expert local knowledge of 41 African markets – which is often hard to access – to a much wider audience. We think these three trends are strong evidence that Africa has weathered the storms of late and is very much on track for improved growth in 2018,” Edward George, Head of Ecobank Group Research, said.