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- Economic growth in sub-Saharan Africa is projected to fall by -3.3%, due to the Covid-19 pandemic, says the World Bank.
- The pandemic may also drive 40 million people into extreme poverty in 2020, essentially undoing five years of progress.
- This occurs in the two economic powers of the region, South Africa and Nigeria, both reported sharp falls in GDP in the second quarter of the year.
Sub-Saharan Africa is projected to experience its first recession in 25 years, with growth projected to fall -3.3% in 2020 due to the Covid-19 pandemic, according to the World Bank.
The World Bank, in a report, said that containing the spread of the Covid-19 virus has come at a high economic cost. In Africa, the pandemic is expected to drive 40 million people on the continent into extreme poverty, essentially undoing at least five years of progress.
Per capita gross domestic product growth is expected to contract by almost 6%.
“The road to recovery can be long and steep, but prioritizing policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and more inclusive recovery for African countries.” . Albert Zeufack, the World Bank’s chief economist for Africa, said in a statement accompanying the report.
The bank noted that the two economic giants of sub-Saharan Africa, South Africa and Nigeria, saw sharp falls in GDP in the second quarter of the year. South Africa’s economy contracted -17.1% year-on-year, while Nigeria’s fell -6.1%.
“The drop in growth has been strongest among metal exporters, where real GDP is expected to contract by 6%, partly reflecting the large drop in production in South Africa,” the bank said.
“Among oil exporters, after expanding 1.5% in 2019, real GDP is projected to fall more than 4% in 2020, due to contractions in Angola and Nigeria.”
In non-resource intensive countries like Côte d’Ivoire, Ethiopia and Kenya, growth is expected to slow but will remain positive. Meanwhile, tourism-dependent economies, such as Cape Verde, Mauritius and Seychelles, experienced sharp contractions.
Massive investment in all countries and financial support from the international community, along with reforms, are needed to aid recovery, the World Bank said.
The bank said it would deploy $ 160 billion (about R2.6 trillion at current exchange rates) in financial support over 15 months to help more than 100 countries protect the world’s poor and vulnerable, support businesses and strengthen economic recovery.
