The World Bank has said that Sub-Saharan Africa will reverse an economic contraction next year and could grow by 2.1 per cent as countries in the region begin to ease movement restrictions induced by the coronavirus pandemic.
It, however, noted that the impact of the coronavirus will endure for years to come as many as 40 million people could be pushed into extreme poverty, erasing five years of gains fighting poverty.
The Bretton Wood lender made the disclosure on Thursday, noting that the region’s gross domestic product (GDP) is on track to shrink 3.3 per cent this year as a result of the double-edged sword of the disease and lower oil and commodities prices.
Though it noted that the fallout that rose from the pandemic could be hard to predict, it said the growth of about 2.1 per cent could follow in 2021 and 3.2 per cent in 2022.
It explained that 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.
It projected that by the end of 2021, the region’s real per-capita GDP may have regressed to 2007 levels.
The region will lose at least $115 million in output this year and long-term losses are expected 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 with 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.
The lender noted that oil-exporting countries have been hit hardest, with growth expected to drop by more than 4 per cent in Angola and Nigeria.
It noted that to help alleviate the effect on Africa’s poorest countries, the World Bank and the International Monetary Fund (IMF) 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 lender said.
