Buffeted by a historic recession in 2020, sub-Saharan Africa’s energy sector and economy experienced a challenging 2021, exacerbated by Covid-19-related lockdowns.

Now, the region’s economies are rebounding and, spurred by the global energy transition, governments are decarbonising across the energy value chain, consultancy IHS Markit states in a blog post titled ‘Africa Energy and Economy Review and Outlook (2021–22): A Time of Transition to an Uncertain Destination’.

The blog post highlights that the size and scale of these economic and energy transitions, which are occurring simultaneously, is unprecedented.

Moreover, Omicron – and, potentially, other Covid-19 variants – is disrupting progress and clouding the future trajectory of initiatives taken today, IHS states.

“With the region beset by a multitude of uncertainties, the only thing clear about what these transitions mean for sub-Saharan Africa in 2022 is that there is no clear line-of-sight ahead,” the authors indicate.

IHS outlines that sub-Saharan Africa is rebounding from a historic pandemic-driven recession in 2020, but that growth is subdued and recovery trajectories diverge among countries.

It notes that Covid-19-related supply chain disruptions have been less severe across the region compared with globally; however, the region is affected by inflationary pressures, challenging monetary authorities.

Moreover, the fiscal debt-to-gross domestic product ratio remains high across the region; therefore, governments are seeking to undertake fiscal consolidation to stem a rising public sector debt burden.

There is also political unrest, constrained fiscal capacity, rising cost of living and upcoming elections which are likely to further drive government instability, the blog post posits.

It highlights that the Africa Continental Free Trade Area (AfCFTA) is making incremental progress in terms of deepening trade linkages.

Lastly, it notes that, at COP26, Africa achieved mixed results, with funding pledges from developed countries to assist with mitigation and adaptation for climate risks falling critically short of stated needs.

IHS points out that upstream development activity is constrained and that the competitor mix is shifting.