The economic output of sub-Saharan Africa has been projected to record a negative decline in growth of -3.2 per cent for the year 2020 as a result of the impact of the novel coronavirus.
This projection was made by a senior manager of Deal Advisory at KPMG, Evans Asare, during a webinar organized by the UK Ghana Chamber of Commerce based on the theme “Planning for Post-COVID-19 Era in Ghana: Investment Opportunities and Key Risks”.
According to him, the economic output of the sub-region may have been fine for the year but for two countries, South Africa and Nigeria nevertheless he was optimistic about the economy picking up.
“In sub-Saharan Africa, putting two major economies that’s, South Africa and Nigeria into consideration, which are both expected to record negative growth or they’re going to shrink in this year, we expect that they pull the performance of the sub-region or sub-Saharan African countries down to -3.2 percent. However, we anticipate that growth will pick up in the coming year.”
Mr. Asare also stated that the global economic output is projected to decline by 4.9 per cent for 2020 as against the 3.0 per cent projection indicated by the International Monetary Fund (IMF) somewhere in April.
“Beginning of the pandemic, I think there were several forecasts, the IMF put out a number at somewhere in April where they projected that global output will decline by 3.0 per cent. Since then, it has been revised and global output is projected to further drop by another 1.9 per cent. In total, we expect global economy to shrink by 4.9 per cent close to 5.0 per cent.”
He, however, emphasized that these are only but projections and the real economic output can be determined by the outcome of the virus and how soon a vaccine is found. Notwithstanding, he is hopeful that 2021 will see positive growth.
“Now the interesting thing is that, this virus is still evolving and we don’t seem to have a hang as to how it’s going to turn out in the next few weeks. So, these numbers or these projections are still subject to the number of assumptions that the institution made. For 2021, given that there will be some kind of progress towards a vaccine being discovered, given all the interventions by all the various governments and then multilateral institutions, we expect that economic output will pick up in the coming year. So, it’s going to grow by 5.0 per cent.”
Mr. Asare holds that the advanced economies are the hardest hit with an estimating decline of 8.0 per cent in 2020 but they are expected to bounce back in 2021.
While detailing the economic output for emerging economies, he indicated that China’s record of Gross Domestic Product (GDP) of 1.0 per cent in 2020 is expected to pull the other economies in their category.
“For emerging economies like China, India, Brazil and co, we anticipate that it will still have a significant impact though China seems to have turned the curve around. So, it is projected to, for instance, record a GDP of 1.0 per cent in 2020. And therefore, it’s expected to pull the performance of the emerging economies and therefore, we see that the impact is not going to be that significant as compared to advanced economies.”
He further disclosed that for emerging economies, their decline in economic output is caused by India and other Asian countries but they are projected to rebound in 2021 as well.
“So, emerging economies are projected to shrink by 3.0 per cent and it’s mainly going to be driven by falls in India and then the Asian countries. In 2021, these economies are expected to also bounce back to about 5.9 per cent on the back of rising output from China, India and other economies.”
