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The region will lose at least $ 115 billion in production this year and long-term losses are expected.
- The coronavirus pandemic has put “a decade of hard-won economic progress” at risk for sub-Saharan Africa, says the World Bank.
- However, infection and death rates in the region have not been as high as anticipated.
- Sub-Saharan Africa’s gross domestic product is on track to contract 3.3% this year, its worst performance on record.
Sub-Saharan Africa will likely reverse an economic contraction next year as countries in the region begin to ease movement restrictions, even as the impact of the coronavirus will linger for years to come, according to the World Bank.
The pandemic has put “a decade of hard-earned economic progress at risk,” the Washington-based lender said Thursday in its outlook for the region. Up to 40 million people could be pushed into extreme poverty, erasing five years of achievements in fighting poverty, the bank said.
Sub-Saharan Africa’s gross domestic product is on track to contract 3.3% this year, its worst performance on record, due to the combined effects of the disease and lower oil and commodity prices. Growth of around 2.1% in 2021 and 3.2% in 2022 could follow, the bank said.
Rates of infections and deaths in the region have not been as high as previously anticipated, with one confirmed case per 1,000 people and about 25,000 deaths at the end of September, the bank said. Still, the economic consequences of the pandemic remain difficult to predict.
Second wave
The lender’s baseline scenario assumes that the number of new infections will continue to decline and that new outbreaks will not lead to new lockdowns. If the outbreak is longer or if there is a second wave, the economy of sub-Saharan Africa may expand by only 1.2% in 2021 and 2.1% in 2022. By the end of 2021, the real GDP per capita of the region it may have regressed to 2007 levels, according to the report.
The region will lose at least 115,000 million dollars in production this year and long-term losses are expected “and the level of real GDP per capita is expected to contract by 2.1% and 5.1%”, which confirms earlier forecasts that sub-Saharan Africa will experience its first recession in a quarter century in 2020.
While East Africa and Southern Africa are expected to experience slower growth in 2020 compared to West and Central Africa, their economies may expand faster next year at 2.7%, up from 1.3% in West Africa and Central. Oil-exporting countries have been hit the hardest, with growth expected to fall by more than 4% in Angola and Nigeria.
To give Africa’s poorest countries a breather, the World Bank and the International Monetary Fund have proposed to suspend debt service this year. However, that would address only a fraction of the total debt, and debt relief from private creditors is likely also needed, the lender said.
