By Kunle Aderemi

The International Monetary Fund’s (IMF) latest economic growth outlook for sub-Saharan Africa is the worst since 2000. This is because in 2016 there were more African countries that experienced a drop in their economic growth. When compared to their 2015 performance, economic growth in 34 out of 54 African countries declined.

However, despite this dismal overall performance, there are 31 countries that grew by at least three per cent in 2016, and 14 that grew above five per cent. Not only do most of these countries have a small economy with a gross domestic product (GDP) of less than US$50bn, they are also predicted to consistently grow at a fast pace in the coming years. Hence, even if growth in the big African economies is lagging, smaller African countries are accelerating forward.

While the IMF predicts that 2017 figures, which are yet to come out, will be better for Africa, though the five biggest African economies will still barely grow. The impact of the decline of oil prices has been felt the most in Algeria, Angola and Nigeria. Egypt still feels the ripples of its 2011 revolution, though it has slowly recovered its growth to above four per cent, and the IMF forecasts better numbers for the coming year.

Effects of political uncertainty in South Africa are directly felt in its economy, affecting the overall business confidence. Massive foreign direct investment (FDI) outflows since 2012 show that South African businesses are keener to invest overseas than within the country.

However, the IMF statistics show that the economic outlook for smaller African economies looks much brighter. By and large, 36 out of the 54 African countries will improve their economic growth performance and 37 countries will grow by at least three per cent. Moreover, 17 countries will grow by at least five per cent, whereas only four will have negative or zero growth.

The top five fastest-growing economies were Ethiopia, Côte d’Ivoire, Tanzania, Senegal and Guinea. Only Ethiopia and Tanzania have a GDP above $50bn. Among the next five, only Kenya, with an economic growth of 5.8 per cent in 2016, has a GDP above $50bn and is estimated to reach $78.4bn.

Looking at these 10 fastest-growing African countries, they have a combined GDP of $303bn in 2017, representing about 15 per cent of the whole of Africa. If all these countries grow at more than five per cent average until 2022, they could add another $100bn to their combined GDP.

Their growth thus far has had a great impact on their GDP per capita. And according to UN data, not only have most been able to create the right conditions to attract FDI, but the amount of FDI received has also been increasing year on year.

The effect of all these foreign investments has been translated into higher economic growth, as well as higher potential returns for the investors. This reinforcement cycle of investment and economic growth will continue, as shown by the high growth estimates by the IMF for the coming years.

Shrewd investors will see the forest for the trees, and the silver lining of every cloud. There are many bright spots among the smaller African countries, where there are potential opportunities that can be tapped into.

But to build on the progress made so far, all African governments must continue the hard work of improving the overall economic environment of their respective countries, so that the whole continent can be uplifted.

Kunle Aderemi is an Africa-focused FDI expert based in the UK. He can be contacted at info@fodionconsultants.co.uk.