Africa: World Bank confirms economic recession in sub-Saharan Africa

10/09/2020 Ethiopia, Technology, World



[ad_1]

Nairobi – Driven by the economic fallout of the global COVID-19 pandemic, growth in sub-Saharan Africa is projected to fall to -3.3 percent in 2020, pushing the region into its first recession in 25 years, according to the latest analysis. regional economic. Pulse of Africa: charting the path to recovery. The pandemic could also drive 40 million people into extreme poverty in Africa by 2020, erasing at least five years of progress in fighting poverty.

With more than a million COVID cases reported across the continent, the pandemic is not yet under control in sub-Saharan Africa. Some governments, notably Senegal and Mauritius, have acted quickly to reduce the spread of infections; however, successful containment measures have a high economic cost, as has been seen around the world.

“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.” said Albert Zeufack, the World Bank’s chief economist for Africa’s regions.

Nigeria’s real GDP contracted 6.1 percent year-on-year in the second quarter of 2020, the worst result in more than a decade. South Africa, operating under severe containment measures, saw its real GDP contract by 17.1 percent year-on-year in the second quarter of 2020. Angola, sub-Saharan Africa’s second-largest oil producer after Nigeria, saw its economy contract by 1.8 percent annually -yearly in the first quarter of 2020.

The decline in growth has been strongest among metal exporters, where real GDP is expected to contract by 6 percent, partly reflecting the large drop in production in South Africa. Among oil exporters, after expanding 1.5 percent in 2019, real GDP is projected to fall more than four percent in 2020, due to contractions in Angola and Nigeria.

In contrast, for countries that are not resource intensive, the decline in growth in 2020 is expected to be moderate, on average. In several resource-poor countries, including Côte d’Ivoire, Ethiopia and Kenya, growth is expected to decelerate substantially but remain positive, due to their more diversified economies. Meanwhile, the tourism-dependent economies, especially those of Cape Verde, Mauritius and the Seychelles, experienced a sharp contraction as exceptionally weak international tourism severely affected the service sector.

The substantial drop in economic activity will cost the region at least $ 115 million in lost production this year. Per capita gross domestic product growth is expected to contract by nearly 6 percent, in part due to lower domestic consumption and investment triggered by containment measures to slow the spread of the coronavirus.

“Although the pandemic is not over and the persistence and spread of the virus is uncertain, African governments have begun to implement policies and programs to support an inclusive and sustainable post-pandemic recovery,” said Hafez Ghanem, World Bank Vice President for the Eastern Region and South Africa. “Countries are implementing policies and programs that help create jobs and accelerate

economic transformation to reduce the economic impact of the pandemic now and develop the necessary capacities to ensure inclusive economic growth in the future. “

Africa’s Pulse notes that the road to recovery will also require massive investment in all countries, as well as financial support from the international community, and recommends a bold reform agenda that includes policies that create fiscal space, along with policies to accelerate creation. of employment. Several countries, including South Africa, Nigeria and Ethiopia, have already started implementing the necessary reforms in energy and telecommunications driven by the current crisis, and 25 percent of African companies have accelerated the use of digital technology and increased investments in solutions. digital. As of mid-September, 46 countries in sub-Saharan Africa had implemented 166 social protection measures, and social assistance accounted for 84% of these measures. Social protection programs have proven to be a fundamental tool to mitigate the social impact of the pandemic.