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Africa’s economic scene: 2023 Highlights

Africa’s economic scene: 2023 Highlights

Major economic stories reshaping Africa in 2023 ( Courtesy photo)

As the curtain falls on 2023, Africa stands at the crossroads of economic transformation, having weathered a year marked by significant highs and lows that have left an indelible mark on the continent’s economic landscape. The dynamic interplay of challenges, strengths, and newfound opportunities has created a narrative that transcends borders, illuminating the diverse realities within the 54 countries that make up this vast and resource-rich continent.

1. Nigeria’s bold move: Removal of fuel subsidy

May 2023 will be remembered as the month Nigeria took a bold step by removing its age-long fuel subsidy, a move that had been politically sensitive for years. President Bola Tinubu, upon inauguration, announced the removal, setting the stage for a new economic paradigm.

The Minister of Finance, Wale Edun, later revealed a significant boost in the federation account, with improved revenue inflow surpassing N1 trillion since the subsidy removal. However, this move has not been without challenges, as the rise in fuel prices has correspondingly increased the cost of essential commodities, impacting the daily lives of Nigerians.

2. Visa-free travel: Rwanda and Kenya lead the way

In a historic move, Rwanda announced visa-free entry for all African states in November, signaling a commitment to fostering intracontinental travel. President Paul Kagame emphasized the importance of recognizing Africans as the future of global tourism.

Following suit, Kenyan President William Ruto announced plans to eliminate visa requirements for all African visitors by the end of 2023, aiming to enhance trade and strengthen economic ties across the continent.

3. Aliko Dangote’s game-changing refinery

Africa’s richest man, Aliko Dangote, made headlines in May with the inauguration of his mega oil refinery in Nigeria. The $20 billion project, touted as the largest in Africa, seeks to address Nigeria’s dependence on fuel imports by providing a processing capacity of 650,000 barrels per day.

While the refinery is set to produce Automotive Gas Oil and JetA1 in January 2024, delays in crude oil supply have impacted the production of Premium Motor Spirit, popularly known as petrol.

4. Inaugural Africa Climate Summit in Kenya

September saw African leaders converge in Nairobi for the first-ever Africa Climate Summit.

The summit aimed to address the continent’s climate change challenges and formulate sustainable solutions. Despite contributing the least to global warming, Africa bears the brunt of climate change effects, exacerbated by limited government capacity, debt distress, and economic shocks. The summit resulted in climate financing deals worth $23 billion from various countries and institutions, demonstrating a collective commitment to addressing this pressing issue.

5. Ethiopia’s default on debt repayment

Ethiopia marked Africa’s third consecutive default by missing a $33 million coupon payment on its sole international government bond.

The country grapples with financial difficulties stemming from the COVID-19 pandemic and a concluded two-year civil war in November 2022. Ethiopia’s default follows Zambia and Ghana, making it the third African nation to default in the COVID-19 era.

6. Ethiopia and Egypt join BRICS

In a surprising geopolitical development, Ethiopia and Egypt, alongside three other nations, are set to join BRICS on January 1, 2024.

This inclusion expands the bloc, originally comprising Brazil, Russia, India, China, and South Africa, to include three African nations. The BRICS countries collectively represent 42% of the world’s population, 30% of the global landmass, and 24% of the global economic output.

7. Angola’s exit from OPEC

After 16 years of membership, Angola announced its departure from the Organization of the Petroleum Exporting Countries (OPEC) effective January 1, 2024.

The decision comes as Angola struggled to meet its OPEC+ output quota due to declining investment. This move leaves OPEC with 12 members and impacts approximately 27% of the 102 million bpd world oil market.

As Africa navigates the complexities of its economic landscape, the stories of 2023 serve as both a reflection of the challenges faced and a testament to the resilience embedded within the continent.

Original story from the business insider Africa

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