Major economic stories in Africa in 2023

The whole year was like a rollercoaster, as the continent experienced a dynamic interplay of highs and lows, shedding light on its inherent challenges, strengths, weaknesses, and, most importantly, the resilience embedded within its 54 diverse countries.

This period also illuminated not only the challenges faced but also the myriad opportunities that emerged, seriously reshaping how Africa’s economic scene looks.

We saw big moves in Africa’s largest economy, like the scrapping of the age-long fuel subsidy and the good news with Rwanda and Kenya lifting visa bans. The buzz around Dangote Refinery, the largest in Africa, and the launch of the first-ever Africa Climate Summit is hard to ignore.

Business Insider Africa looked at some of the biggest economic news that broke in 2023, and here they are:

In May, Nigeria removed its age-long fuel subsidy that had traditionally kept fuel prices low for its citizens.

Successive governments in Nigeria have tried and failed to remove fuel subsidy, a politically sensitive issue in Africa’s largest economy. However, President Bola Tinubu announced the removal of the fuel subsidy upon inauguration.

In November, the Minister of Finance, Wale Edun revealed that the federation account has been witnessing an improved revenue inflow of over N1 trillion since the removal of subsidy. The rise in fuel prices, a crucial commodity for Nigerians, has also resulted in a corresponding increase in the cost of food and services.

In November, Rwanda announced visa-free entry for fellow African states. President Paul Kagame stressed that Africans are the future of global tourism and the continent should not lose sight of its market as its middle class continues to grow at a fast pace in the decades to come.

Kenyan President William Ruto also announced plans to eliminate visa requirements for all African visitors by the end of 2023 to enhance trade and foster closer economic ties with other African nations.

In May, Africa’s richest man, Aliko Dangote inaugurated his mega oil refinery in Nigeria. The long-awaited $20 billion refinery is heralded as a game-changer capable of driving Nigeria and Africa’s refining revolution.

Although Nigeria is the largest oil producer in Africa, it currently imports refined petrol due to the dysfunction of its four refineries, resulting in a high dependence on fuel imports.

Dangote’s refinery seeks to address this issue and reshape the country’s fuel landscape. The refinery has a processing capacity of 650,000 barrels per day and aims to produce 250,000 barrels of gasoline per day and 100,000 barrels of diesel per day.

The Dangote refinery will start the production of Automotive Gas Oil (diesel) and JetA1 (aviation fuel) in January 2024. However, the production of Premium Motor Spirit popularly called petrol is being delayed by the supply of crude oil in instalments. This month, the Dangote refinery received 3 shipments of crude after years of delay.

In September, Africa held its inaugural Climate Summit in Nairobi, Kenya to discuss Africa’s climate change challenges and formulate sustainable solutions. Despite being the continent that contributes the least to global warming, it is the hardest hit by the effects of climate change.

Moreover, the limited capacity of African governments to respond to the climate crisis, exacerbated by debt distress and economic shocks, necessitates urgent action to provide debt relief and increased liquidity.

During the summit, African countries struck climate financing deals worth $23 billion from countries and institutions, including the AfDB Group and Global Center on Adaptation, United Arab Emirates (UAE), and Climate Asset Management.

Ethiopia marked Africa’s third default in three consecutive years as it missed a $33 million “coupon” payment on its sole international government bond.

The East African country has been contending with increased financial difficulties arising from the effects of the COVID-19 pandemic and a concluded two-year civil war in November 2022.

In 2020, Zambia opted to bow out of a $42.5 million eurobond repayment, becoming the first African nation to default on its debt in the Covid-19 era. Last December, Ghana suspended payments on most of its $28.4 billion external debt, becoming the second country to default.

In August, the BRICS group, originally comprising Brazil, Russia, India, China, and South Africa, extended invitations to six more nations. However, Argentina declined the invitation, as President Javier Milei, who assumed office this month, reversed his predecessor’s membership bid.

Collectively, the BRICS countries lay claim to 42% of the world’s population, 30% of the global landmass, and 24% of the global economic output.

After 16 years of membership, Angola has said it is leaving the Organization of the Petroleum Exporting Countries (OPEC) with effect from Jan. 1 2024.

Angola’s departure from OPEC will leave it with 12 members and crude oil production of about 27 million bpd, some 27% of the 102 million bpd world oil market. In recent years, Angola has been unable to meet its OPEC+ output quota because of declining investment.

Following Angola’s decision to exit the OPEC oil cartel, Nigeria and Congo have reaffirmed their commitment to the Saudi-led oil producer group.