Sub-Saharan Africa economies to see recoveries from 2021
The economy of Sub-Saharan Africa will likely see a rebound to a positive growth territory to 2.1 per cent in 2021 on the back of easing of movement restrictions, says the World Bank on a new outlook for the region.
The COVID-19 pandemic has put “a decade of hard-won economic progress at risk,” the Washington-based lender said Thursday in its outlook, reports Bloomberg.
According to the World Bank’s outlook, Sub-Saharan Africa’s gross domestic product, GDP is on track to shrink 3.3 per cent 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 per cent could follow in 2021 and 3.2 per cent 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 per cent in 2021 and 2.1 per cent in 2022. By the end of 2021, the region’s real per-capita GDP may have regressed to 2007 levels, according to the report.
That’s likely to lead to long-term output losses “with the level of real per-capita GDP expected to contract by 2.1 per cent and 5.1 per cent,” 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 to West and Central Africa, their economies may expand faster next year at 2.7 per cent, versus 1.3 per cent in West and central Africa.
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 bank said.