Kenya is now the third-largest economy in Sub-Saharan Africa after surpassing Angola.
It was noted that while IMF projects Kenya’s GDP to grow by 1%, Angola’s GDP might fall by 1.4% in the year 2020. Kenya’s economy has been on a steady rise since 2013, hitting shy of a GDP of $100 billion in 2019. Inversely, Angola’s economy has declined since 2016 due to the decline in oil output and the devaluation of its currency.
Last year December, the IMF launched the Extended Fund Facility planning to disburse $3.7 billion to grow the economy and reduce oil dependency.
Moreover, the Kwanza tumbled so low as the Central bank sought a middle ground between its official rate and rates in the black market.
Moreover, reduced demand for Oil in China, the first country to record Coronavirus cases and her top oil importer hit Angola hard. Angola bore double blows from the sudden drop in oil prices and the pandemic, with a weakened economy.
According to Sergio Pugliese, the Executive President for the African Chamber of Commerce in Angola, the pandemic affects up to 30% of Africa’s oil demand. These implications could take up to nine months to level off.
“The COVID-19 pandemic acted as an accelerant and quickly changed market conditions. One of the biggest effect was removing around 30% of demand from the market. African producers now produce oil that doesn’t have a consumer market, therefore, until the demand and supply gap closes, African producers will have to keep going. This could take between six to nine months to normalize.” – SergioPugliese, Executive President for the African Chamber of Commerce in Angola.
Nigeria is the largest African economy, followed by South Africa and then Kenya. However, Kenya’s GDP is way far from Nigeria and South Africa. In 2019, Nigeria recorded a GDP of $420 billion while South Africa’s GDP hit $339 billion. Kenya, on the other hand, trailed at $91.7 billion.
IMF Projects that Kenya’s economy will hit $148.8 billion by 2024.