“The road to recovery may be long, and it may be 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 inclusive recovery for African countries,” said Albert Zeufack, World Bank Chief Economist for the Africa regions.
More than 90
per cent of the world economies are expected to go into a recess this year due
to the effects of the COVID-19 pandemic, according to a new World Bank report on
Sub-Saharan African economies.
The report,
a regional economic analysis dubbed Africa’s Pulse: Charting the Road
to Recovery, notes that while countries in the region did well to limit the
spread of the virus in its initial stages, the measures used have had
far-reaching effects on the economies.
Most African
countries instituted lockdowns and curfews and closed borders in March, as part
of the strict control measures. But these led to a halt in tourism; one
of the major sources of foreign earnings for countries in Sub Saharan Africa. The other affected sectors include education, hospitality, logistics and
entertainment, which could no longer operate.
Africa has
so far registered just over 1.5 million confirmed cases of COVID-19, with South Africa
accounting for almost half of them, while the continent has recorded
37,000 deaths. Globally, 36
million people have contracted the virus, while just more than a million have
died.
The World
Bank now says that more than 40 million people in Sub-Saharan Africa will slide into
abject poverty as the economies contract by 3.3 per cent in 2020, compared to a
growth of about 4 per cent that had been projected before the outbreak. This will
see the region into its first recession in 25 years, according to the latest World Bank report.
While the
the region is expected to start recovering next year, it could take several years
to get to the levels it was at before the pandemic broke out.
“The road
to recovery may be long, and it may be 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 inclusive recovery
for African countries,” said Albert
Zeufack, World Bank Chief Economist for the Africa regions.
The long
walk to recovery is because Africa will have to wait for the recovery of her
markets in Europe, America and Asia, so that the prices of especially the
commodities that Africa exports, start rising.
Before that,
there will be no real growth, according to Zeufack.
//Cue in;
More than 90…
Cue out… economies can recover.”//
Uganda is
expected to be among the fastest-growing economies at 1.9, more or less the same
as Rwanda and Tanzania, while Kenya will grow at less than 1 per cent, just as
many other non-resource intensive countries. The decline
in growth has been stronger among metals exporters where real GDP is expected
to contract by six per cent, partly reflecting the large drop in
output in South Africa.
Among oil
exporters, after expanding by 1.5 per cent in 2019, real GDP is projected to
fall by more than four per cent in 2020, with the main contractions in
Angola and Nigeria. Economies that
heavily rely on tourism will also be hit longer because even as borders open,
travel for leisure will pick up at a slow rate.
The substantial downturn in economic activity will cost the
region at least USD 115 millionin output losses this year, but the annual average
income per person will also fall to the levels of 2007. This is a loss of
wealth of 13 years. There is
worry that African countries are borrowing too much and that by the
time the crisis ends, many of them could be closer to the debt crisis level of
70 per cent of GDP, according to Zeufack:
//Cue in; entering
the crisis…
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The slowdown
will also be abetted by lower domestic consumption and investment brought
on 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 started putting in place policies and programs to support
an inclusive and sustainable post-pandemic recovery” said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa.
Africa’s Pulse notes that the road to recovery will also
require massive investments across countries, as well as financial
support from the international community. It recommends
a bold reform agenda that includes policies that create fiscal space,
along with policies to speed up job creation.
Zeufack says
Policies that are needed in place for sustainable recovery must focus on
creation of meaningful jobs:
//Cue in; And
these policies include…
Cue out…. That
lead to job creation.”//
By
mid-September, 46 countries in Sub-Saharan Africa had put in place 166
social protection measures —with social assistance representing 84 per cent
of these measures. Social
protection programs have proven to be a critical tool to mitigate the social
impact of the pandemic.
