Sub-Saharan Africa economy to rebound next year

11 Oct, 2020 - 00:10 0 Views
Sub-Saharan Africa economy to rebound next year

The Sunday Mail

Sub-Saharan Africa will probably reverse an economic contraction next year as countries in the region begin to ease movement restrictions, even as the impact of the coronavirus will endure for years to come, according to the World Bank.

The pandemic has put “a decade of hard-won economic progress at risk,” the Washington-based lender said on Thursday in its outlook for the region.

As many as 40 million people could be pushed into extreme poverty, erasing five years of gains fighting poverty, the bank said.

Sub-Saharan Africa’s Gross Domestic Product is on track to shrink 3,3 percent this year, its worst performance on record, due to the combined effects of the disease and lower oil and commodities prices.

Growth of about 2,1 percent could follow in 2021 and 3,2 percent in 2022, the bank said.

Still, the fallout of the pandemic remains hard to predict.

The lender’s baseline scenario assumes that the number of new infections will continue to slow and that fresh outbreaks won’t result in new lockdowns.

If the outbreak is more prolonged or if there’s a second wave, Sub-Saharan Africa’s economy may expand by only 1,2 percent in 2021 and 2,1 percent in 2022.

By the end of 2021, the region’s real per-capita GDP may have regressed to 2007 levels, according to the report.

The region will lose at least US$115 million in output this year and long-term losses are expected “with the level of real per-capita GDP expected to contract by 2,1 percent and 5,1 percent,” confirming earlier forecasts that Sub-Saharan Africa will suffer its first recession in a quarter of a century in 2020.

While East Africa and Southern Africa are expected to experience slower growth in 2020 compared with West and Central Africa, their economies may expand faster next year at 2,7 percent, versus 1,3 percent in West and Central Africa.

Oil-exporting countries have been hit hardest, with growth expected to drop by more than 4 percent in Angola and Nigeria.

To give Africa’s poorest countries some breathing room, the World Bank and the International Monetary Fund have proposed suspending debt servicing this year.

However, that would address only a fraction of total debt, and debt relief from private creditors is likely needed as well, the lender said. — Bloomberg.

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