Africa’s Economic Outlook

Africa’s economic growth is projected to rise slightly to 3.9% in 2023 after a considerable decrease to 3.6% over the past year, says an overview report of recent economic and social developments in Africa by the UN Economic Commission for Africa (ECA). The report centers on the complex economic and financial picture caused by the confluence of shocks that slowed down the global economy. These includes the impact of the COVID pandemic, the rise in prices fueled by the conflict in Ukraine and extreme weather patterns. The report warns that 149m previously non-poor Africans are now facing the risk of falling into poverty.

A recent World Economic Forum  (WEF) report shows that major disruptions affect the value chain of SMEs significantly more than they affect larger enterprises. Disruptions, such as COVID and geo-political tensions, often lead to failure among these businesses. The WEF points out that the SA is an example of a significant risk to SMEs from load shedding and the acute shortage of power. Power outages mean that they cannot operate. No production or trade is possible, and inventory is damaged. The enterprises cannot plan and execute their operations effectively, or meet the demands of their customers. They therefore lose revenue and customers. This may not come as a surprise to ecommerce businesses in SA!

Meanwhile, MTN has noted that the growing number of load shedding (power outages) have caused MTN’s network availability in SA to drop below levels in Nigeria, a country where electricity from the national grid is virtually nonexistent. In Nigeria, where the grid has failed to meet demand for years, MTN built its network with backup power from the start, knowing it was essentially responsible for its own power generation. In SA where the assumption at MTN’s inception in 1994 was that Eskom would take care of all power requirements, provision for backup was not in mind.