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Mixed fortunes ahead for African countries in 2023

Economic growth in Africa is expected to slow to 3.8% in 2023, from 4.1% in 2022, according to the United Nations World Economic Situation and Prospects (WESP) 2023 report.

In terms of how this is expected to play out across the continent, it says growth is expected to ramp up slightly in West Africa, remain relatively stable in Central and East Africa and decelerate somewhat in North and Southern Africa.

In the same vein, during a conference recently held by the Agence Française de Développement (AFD) Group in Paris, experts summed up their predictions for African economies in 2023, ranging from a marked economic upswing in some regions to rising debt and food insecurity in others.

One of the top trends discussed was that oil-dependent economies have been hard hit, while economies fuelled by a wider variety of activities have proved more resilient.

Matthieu Morando, macroeconomist with AFD’s Africa Department told the conference, “Diversified countries have rebounded much better after the Covid crisis. They maintained a degree of growth in 2022, which is somewhat of an exception [to world averages], and they are bouncing back now with growth rates of around 5%.”

As a comparison, while oil exporter Nigeria saw its GDP grow by 3% last year, its West African neighbours Côte d’Ivoire, Benin and Togo, which Morando described as being “very diversified,” all hovered around 6%.

According to predictions from the IMF six African countries will be among the top fast-growing economies in 2023, with Libya (17.9%), Senegal (8.1%), Niger (7.3%), DRC (6.7%), Rwanda (6.7%) and Cote d’Ivoire (6.5%). These six African countries were among the IMF’s predicted world’s top 10.  

However, challenges to growth include ongoing inflation rates, increasing trade costs and interest rate hikes, and that access to concessional financing to fund continued growth is limited, says the report.

Feedback from LEX Africa members on their outlook on how their countries will fare in 2023 vary in many respects. But common denominators remain, including lack of infrastructure, which is holding back progress, and concern over global disruptors.


Rwanda is a fast-growing economy with a young population totalling over 12 million, according to Denise Isimbi, junior associate at LEX Africa member, Certa Law in Kigali. She says the country has made great strides towards economic development in recent years.

The government’s priorities are to promote private sector development and grow Rwanda’s small and medium enterprises (SMEs). It has introduced several measures to improve the environment for SMEs to flourish.

The fintech industry in Rwanda is experiencing rapid growth, with new companies entering the market every day, and is driven by key trends, such as the increasing demand for digital services and payment solutions in the country. Rwanda’s government has been creating favourable conditions for fintech start-ups and encouraging investment in new technologies through the new Sandbox Law of the National Bank.

Recent new laws include the law on investment promotion and facilitation on 8 February 2021, which provides new guidelines regarding investment certificates issued to foreign investors. The law also provides new tax-based export incentives for investors in the country, says Isimbi.   

To adapt to evolving investment priorities capable of attracting foreign direct investment (FDI), the government has granted the cabinet authority to approve special additional incentives for strategic investment projects that are not provided for by the investment law.

“Strategic investments are those of national importance impacting the development of Rwanda,” says Isimbi.

In 2020, the Rwandan government passed a new investment code aimed at improving the business environment and promoting investment in the country. The code provides for various incentives for investors, such as tax holidays, reduced customs duties, and accelerated depreciation on investment assets.

The government has also made significant efforts to improve the ease of doing business in the country. “In 2020, Rwanda was ranked as the second easiest country in Africa to do business by the World Bank, and it is also a member of the East African Community, which has a common market and customs union,” says Isimbi.

In 2019, Rwanda passed a new law governing public-private partnerships (PPPs). The law provides for a clear legal framework for PPPs, including the procurement process, dispute resolution mechanisms, and risk-sharing arrangements. “This law aims to promote private investment in public infrastructure and services,” she says.

Another important development is the new Rwanda Civil Code, which was enacted in 2020 and consolidates various laws governing civil matters, such as contracts, property, and torts, into a single comprehensive code.

“Furthermore, in 2020, Rwanda passed a new law regulating electronic transactions and communications. The law provides for the legal recognition of electronic signatures and documents, which is expected to improve the efficiency of business transactions and reduce costs.”

Investment impediments

Several issues are affecting investment in Rwanda, including infrastructure gaps, limited access to electricity and poor transportation systems in some areas, which make it difficult for investors to do business in the country.

“Another is that many businesses in the country struggle to secure funding, as the country’s financial sector is still developing. This can make it difficult for businesses to grow and attract investment.”

Bureaucratic hurdles are another challenge, including the cumbersome process of starting a business and obtaining necessary licenses and permits, “and this can make it difficult for investors to navigate the investment landscape.

Local and global events that could impact the business environment in Rwanda in 2023 include the ongoing COVID-19 pandemic, which continues to have a major impact on the global economy and could continue to affect the business environment.

Rwanda is located in the heart of East Africa, and developments in the region, such as political instability or economic growth, can significantly impact the country’s business environment.

Rwanda is also vulnerable to natural disasters, such as floods, volcanic eruptions and landslides, which could disrupt business operations and impact the investment climate, says Isimbi.

On the upside, the Rwandan government has been actively promoting investment and economic growth with free economic zones, easy and expeditious registration of businesses and other changes in policy.

Republic of Guinea

There have been major developments in the mining sector in Guinea, which is rich in natural resources, especially minerals including bauxite (aluminum ore), iron ore, gold, diamonds, uranium, and prospective offshore oil reserves, says Saran Kaba, lawyer from the Ontario Bar, at LEX Africa member, Thiam & Associés.

Most of these resources have yet to be extracted due to the lack of infrastructure and the high cost of transporting ore to the ports. 

But in December 2022, the Term Sheet for the world-class Simandou project was signed by the State and the industrial partners to initiate the financing process.

Multi-billion mining project

The Simandou project is a world class integrated mining project to exploit the world’s largest iron reserve. It involves the construction of extensive multi-user and services infrastructure including a 500 km railway line and a deep-water port to be operational in 2025, says Kaba.

She says the mining sector remains the largest revenue generator, contributing up to 35% of the country’s GDP. “Investment in the mining sector has remained largely stable despite the change in the political environment. Since the coup d’état in September 2021, the CNRD has led significant reforms in the mining sector to reduce inefficiencies and improve governance for mining revenues and monitoring.”

The $15 billion Simandou mining project will create jobs and infrastructure and influence the investment and economic landscape in the country.

There is also considerable potential for growth in Guinea’s agricultural and fishing sectors, and investment opportunities in hydroelectric projects are growing due to its favourable climate, says Thiam associate Hadiatou Barry.

“Guinea’s abundant rainfall and numerous rivers have the potential to generate enough electricity to power Guinea, and potentially its surrounding neighbours.”

She says business developments will most likely be led by the energy, agriculture, and mining sectors.  “The transition government hopes to attract foreign investors to agriculture, construction, education, finance, and communication.”

Barry says the energy sector has also seen significant investment. “Several partnerships and financing agreements have been concluded in 2022 to foster investment in this sector and improve the rate of electricity coverage for the country.” For instance, the African Development Bank (AfDB) has granted $66.39 million in financing, which aims to increase access to electricity in the six cities and surrounding localities.

In December 2022, an additional financing agreement worth EUR 17 million was signed for the inter-regional electrical interconnection project that aims to improve access to electricity.

Legal developments underway include the implementation of the new law on local content, to promote and develop local services and production, says Barry.

“Also, the reform of the judicial system focuses, among other things, on better enforcement of court decisions, the renovation of judicial infrastructure, and the issuance of implementing regulations for the legal corpus.”

Internal political factors and external factors such as the COVID 19 pandemic and the conflict in Ukraine, have impacted certain sectors in Guinea, says Barry.

With the Russia-Ukraine conflict impacting food prices and rising inflation, the transition government has doubled the budget, from 2% to 4% for agricultural development and local production to increase food security.

A major legal reform impacting business sectors in Guinea is the reform of the Local Content Law in September 2022, which is applicable to all small and medium size enterprises whether they are domestic or foreign.

In March 2022, the government also affirmed its intent to exercise its right to transport by sea 50% of the production of all mining companies in the production and export stage.

Investment hinderances

The biggest issues hindering investment in Guinea include immense corruption, a general lack of infrastructure, political instability, and lack of skilled workers, says Kaba.  

She says the lack of infrastructure is hindering investment in Guinea because a lack of reliable electricity, transportation, and access to clean water makes it difficult to run commercial activities in the country, although improvements are underway.

The literacy rate in the country is growing at an encouraging rate of 12.7% annually, but there is a long way to go with the adult literacy rate which stood at 45% in 2021, according to World Bank data, says Kaba.

The national elections for the return to a civilian regime should be held in 2024, which could potentially have an impact on the political stability of the country and subsequent reforms.


Morocco has embarked on the reform of several texts related to the conduct of business, according to Meriem Oumensour, lawyer at LEX Africa member, I&I Law Firm in Casablanca.

“Morocco is constantly consolidating its efforts to improve its business climate to establish attractive and favourable conditions for the mobilisation of investment in the service of growth and sustainable development.”

She says, legal reforms currently underway include a major overhaul of judicial organisation, amending and supplementing the law relating to freedom of pricing and competition.

The main texts of the Investment Charter: The Framework Law on the Charter of Investment aims to reform state policy for investment, says Oumensour.

She says among the obstacles identified by investors conducting business in Morocco, the difficult application of labour law by the courts and the lack of efficiency and congestion of the commercial courts were noted. Procedural aspects also have shortcomings, particularly in terms of computerisation, rigidity and slowness.

Global disruptions

On disruptive local and global events likely to impact the business environment in Morocco in the year ahead, Oumensour is adamant.

“The suspension of the World Bank’s Doing Business publication and the disruption caused by the persistence of the pandemic have not altered Morocco’s will and stubbornness to continue building a business climate favourable to investment and a catalyst of growth.”

During the International Congress on Investment and Development Challenges held in Dakhla in March 2022, under the theme “An international vision and Moroccan leadership”, the need to complete economic, institutional and regulatory reforms was highlighted, to perfect the business environment, she says.

“In addition, the new investment charter will breathe new life into investment in Morocco,” says Oumensour. “Today, Morocco is entering a new phase of its development, which is characterised by large-scale social programmes.”

Equatorial Guinea

As a new development within the business climate that is underway this year in Equatorial Guinea, it is worth noting the continued implementation of the National Strategy for Sustainable Development 2020-2023. So says Abraham Abia, managing partner of LEX Africa member, Clarence Abogados & Associados, in the capital, Malabo.

Under this strategy the Equatoguinean government is focusing its attention on people, knowledge, innovation, job creation, promotion of entrepreneurship and austerity as drivers of growth and economic development.

In December 2022, the Development Bank of Central African States (BDEAC) approved several agenda items, including the Bank’s New Strategic Plan 2023-2027, says Abia.

“This will provide the BDEAC with a new reference framework for its interventions in favour of the economies of Central Africa during the five-year period 2023-2027. This Strategic Plan aims to make BDEAC a modern institution, the foundation of sustainable development in Central Africa.”

He says, the BDEAC is setting its sights on modernising and improving the quality of its international footprint to increase its capacity to attract diversified resources and concessionary rates for the benefit of the region’s economic operators.

It should be noted that, during 2022, the Equatoguinean government approved a regulation to reduce port costs for the import of certain goods, says Abia. “Within this framework, and to make the port facilities profitable and improve efficiency, the government has initiated a tender with the objective of granting the management of its ports to an international company.”

He says the improvement of telecommunications and other aspects has been positive for attracting foreign direct investment (FDI). “Equatorial Guinea has a hydrocarbons sector with mid-life assets, and this makes it imperative for new investors to inject further capital into those assets and unexplored ones to increase production,” says Abia.

He says the policies adopted by the government intend to diversify the country’s economy and reduce its dependency on the export of hydrocarbons. “One of the main sectors that is visibly going to benefit from these policies is tourism.” He says soon visa applications will be processed electronically.

The streamlining of administrative procedures and the efforts to lower the cost of doing business in the country will also boost output and attract investors, says Abia.

Issues holding back investment in Equatorial Guinea, include legal uncertainty, the increase in customs duties, taxes, and fees, says Abia.

Local and global events that might impact the business environment in 2023 include COVID-19, the war in Ukraine, the large number of elections in countries in the region, management of the country’s public debt and any additional facilities from the IMF.

“Moreover, the identification of a buyer of the country’s largest oil field, Zafiro, an increase in the field’s production and the prospect of new discoveries by hydrocarbons companies required to drill this year will also be determinants,” he says.


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