Poland and Africa: dynamic growth and prospects

Poland has a large internal market with more than 38 million consumers and is also a gateway to the European Union market of 500 million consumers, as well as to Eastern European countries outside the EU.

The Polish economy grew by as much as 5.7% in 2021 (the same growth achieved by the United States); in the fourth quarter of 2021 alone, this figure was 7.3%. Thanks to the country’s strong foundations, entrepreneurship and economic policy, among others, Poland managed to overcome the negative consequences of the COVID-19 pandemic. It is worth noting that Poland is the only country in Europe that was not affected by the recession in 2008-2010. Independent, international experts point to our market as one that is extremely resistant to global perturbations and recessions.

It is also a very stable and reliable market, according to all prestigious rating agencies. Moody’s Analytics assesses Poland’s macroeconomic stability with the credit rating of A2. Standard & Poor’s and Fitch Ratings rate Poland at A-. This implies an extremely low level of risk combined with a high level of financial credibility and ability to service liabilities.

The value of Poland’s GDP is USD 565.85 billion (2020) and exports alone amount to USD 264.5 billion. At the same time, the country is open to foreign investments, and investors can count on comprehensive assistance and support. Last year was record-breaking in terms of the inflow of new investments within the Polish Investment Zone. As emphasised by the Ministry of Development and Technology, as many as 713 decisions were issued to support investments with a total value of PLN 37.1 billion that also created 16,831 new jobs.

”As of 1 January 2022, we recorded 2.58 million active enterprises in the Central Electronic Register and Information on Economic Activity. That’s over 50,000 more than a year ago. Good data are also coming in from the labour market. In November 2021, the unemployment rate in Poland was one of the three lowest in the EU (3% compared to a 6.5% EU average). In December last year, the number of unemployed who registered in employment offices decreased for the first time since the 1990s compared to the previous month,” comments Piotr Nowak, Minister of Development and Technology.

Important events in 2021 included the launch of the construction of the PepsiCo factory for over PLN 1 billion (approx. USD 230 million at the current exchange rate) on land purchased from the Legnica Special Economic Zone.

In March 2022, Google, already present in Poland (including the Google Cloud investment), announced that it had earmarked approx. PLN 2.7 billion (approx. USD 640 million) for the purchase of the Warsaw Hub office complex, which will accommodate 2,700 employees. Prime Minister Mateusz Morawiecki pointed out that Google’s decision, implemented in difficult times, confirms the health and appeal of the Polish economy.

In May 2020, Microsoft announced a USD 1 billion investment plan for digital transformation in Poland, including access to local cloud services.

”Poland has highly qualified and technologically oriented staff with broad horizons and economic infrastructure that is ideal for our company,” said Steve Cohen from J.P. Morgan in a statement to the Polish Investment and Trade Agency (PAIH).

These are just some examples of foreign investment.

In Poland, apart from industry, the TSL sector (Transport, Freight Forwarding, Logistics) and modern services based on digitisation are developing extremely dynamically. The economy is driven, among others, by export and domestic consumption, and agri-food production remains a traditionally strong sector.

AFRICA

Nigeria, Egypt, South Africa, Algeria, Morocco and Kenya were the African countries with the highest GDP in 2021.

Nigeria’s GDP amounted to USD 514 billion last year and was the highest on the continent. With more than 200 million inhabitants, Nigeria produces primarily petroleum products, gold, oil products and chemicals. Their largest recipients are the United Arab Emirates, China and France. However, Burkina Faso and Ghana are in 4th and 5th place.

Half the population of Nigeria is in Egypt. Its GDP reached USD 394 billion. Egypt is the second largest producer of natural gas on the continent, after Algeria, and the Suez Canal is an important transit route for oil and LNG loads. The country is also a major oil producer, the first in size after the African countries belonging to OPEC.

The value of trade between Poland and Egypt in 2021 amounted to almost PLN 2.8 billion, an increase of almost a quarter compared to 2020. This was undoubtedly the best year in the history of trade between the two countries.

The main export category to Egypt is agri-food products. Egypt is the world’s largest recipient of Polish apples with a total export value in 2021 that exceeded PLN 300 million.

South Africa has 58 million inhabitants and, as PAIH points out, it can be a gateway to all the markets of southern Africa. The GDP of this country reached USD 302 billion in 2020. Prospective areas of expansion include cosmetics, FMCG, food, agriculture, and the mining and automotive industries.

The Moroccan market is also worth noting. In 2021, the value of Polish grain exports to the Moroccan market exceeded PLN 150 million, and given the drought in Morocco, demand will only increase in the near future. Huge Polish companies from the FMCG sector have also been operating in this area for some time, including Sante and Bakalland. Currently, the Maspex Group also plans to enter this market with its wide range of products.

Africa’s rich mineral resources put it at the forefront of the world. These include primarily: coal, oil, natural gas, uranium, radium, iron ore, chromium, cobalt, copper, lead, zinc, bauxite, titanium, gold, platinum, lithium, phosphates and diamonds.

“Africa has great potential, and more and more investments are going to the energy and mining sectors, which creates a growing number of opportunities for cooperation and increases the role of Africa in bilateral relations,” says Grzegorz Piechowiak, Deputy Minister of Development and Technology.

In 2020, Africa was home to approx. 1.3 billion people living in 54 countries. According to forecasts, by 2050 the Gross Domestic Product of all African countries is expected to reach USD 29 trillion.

Prepared by Karol Wasilewski, JP