World Bank says Sub-Saharan Africa to contract by 3.3% this year,
The World Bank has said the coronavirus crisis is expected to drive a 3.3% contraction in sub-Saharan African economies in 2020 and could push 40 million people into extreme poverty.
The Washington-based lender said growth in the region would recover in 2021, with economies growing by 2.1%, below 2019’s growth of 2.4%.
“The COVID-19 pandemic has taken a large toll on economic activity in sub-Saharan Africa, putting a decade of hard-won economic progress at risk,” the bank said.
Apart from South Africa, the region appears to have so far escaped the worst of the health crisis, accounting for 3.4% of global infections and 2.5% of deaths, but the World Bank warned of potential risks from the virus.
“Great uncertainty surrounds the scale and trajectory of the pandemic in the region,” it said, citing the experience of European nations and the United States, which are going through a second wave of infections.
The pandemic is expected to regress the economic output per person to 2007 levels by the end of next year, the bank said, and disrupt learning for 235 million students.
This year’s economic growth is expected to be hit by the lockdowns put in place by governments to curb the spread of the virus, and the impact of the global slowdown.
“Disruptions in the tourism industry and lockdowns will cause substantial slow-downs in Ethiopia, Kenya, and the island nations,” the World Bank said.
Economies which are not overly reliant on commodities, like Ivory Coast, Ghana and Senegal, will be spared from steep contractions, thanks to fairly robust outputs in their farming sectors, the bank said.
Governments in the region should take steps to boost their capacity to recover from the impact of the crisis, the World Bank said.
“Countries need to reconstitute their fiscal space to finance programs that can stimulate recovery, improve debt management, and fight corruption,” the lender said. (Reuters.)