Prospects for recovery in sub-Saharan Africa have begun taking shape despite the recession experienced throughout the pandemic, the World Bank biannual economic analysis for the region notes.
Economic growth in the region is estimated to have contracted by 2.0% in 2020. This is likely to change sooner, following actions to containing new waves of the pandemic and speeding up vaccine rollouts.
According to the World Bank’s Africa pulse report, a slower spread of the virus and lower COVID-19 related mortality, strong agricultural growth, and a faster than anticipated recovery in commodity prices will inure to the region’s benefit.
The report notes that economic recovery depends on countries deepening reforms that create jobs, encourage investment, and improve competitiveness. The region’s policymakers are in a battle to lift their people off poverty. Additionally, to improve livelihoods and continue to work toward stronger growth.
To accelerate this growth process, the pulse report recommends that African economies continue to provide support to their economies and the vulnerable in the near term. Efforts should be tailored to reduce countries’ debt burdens. This will help free up resources for public investment in areas that will enhance the human capital of the population.
According to Albert G. Zeufack, World Bank’s Chief Economist for Africa, African economies have made significant contributions to keep their populations afloat throughout the pandemic as well as protect the lives and livelihoods of their people.
“Ambitious reforms that support job creation, strengthen equitable growth, project the vulnerable and contribute to environmental sustainability will be key to bolstering those efforts going forward toward a stronger recovery across the African continent.”
Albert G. Zeufack, World Bank Chief Economist for Africa
Current outlook of the region
Growth in the region is forecast to inch up to 3.4% in 2021. Albeit dependent on the policies adopted by countries and the global community at large.
The World Bank notes that a second wave of COVID-19 infections is partly delaying the 2021 growth projections. Currently, daily infections are about 40% higher than during the first wave.
The spate of Covid-19 infections across countries varies; while some countries had adopted measures to curb the spread of infections, others are experiencing an upward trend.
Real GDP of the region is forecast to grow at 3.1% in 2022. For a lot of the countries in the region, economic activity will remain below the pre-Covid projections in 2021. As a result, this will increase the risk of long-lasting damage from the pandemic on people’s living standards.
Meanwhile, the region’s recovery is likely to vary across countries. Also, non-resource-intensive countries, such as Cote d’Ivoire and Kenya, and mining-dependent economies, such as Botswana and Guinea, are expected to record strong growth in 2021. This growth trajectory is driven by a recovery in private consumption and investment as confidence strengthens and exports increase.
Comparatively, for Eastern and Southern Africa sub-region, growth is forecast to increase by 2.6% and 4.0% in 2021 and 2022.
Furthermore, growth in Western and Central Africa sub-region contracted by 1.1% in 2020. The sub-region’s largest economy, Nigeria saw a less severe contraction. This notwithstanding, this year proves to be promising as the subregion is forecast to grow by 2.1% in 2021 and 3.0% in 2022.
Hopefully, sub-Saharan Africa is on a race to the top, as countries in the region that are debt distressed are being considered by G-20 countries for debt suspension service initiatives. Nonetheless, the region’s growth lies in the hands of its people.
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