East Africa is projected to have the most resilient performance amid the pandemic, entering the crisis with strong growth of 5.2 percent in 2019.
Recent projections by the African Development Bank (AfDB) Group shows that in the baseline scenario, growth is projected to be 1.2 percent in 2020, and the worst-case scenario, 0.2 percent.
According to the AfDB, the resilient performance of the East African Region amid the pandemic is because the region is better shielded by its wider diversification and its lower reliance on primary commodities.
However, the forecast shows that all other regions will experience negative growth in the baseline and worst-case scenarios.
Southern Africa is the region affected most, with growth projected at –4.9 percent in the baseline case, mainly driven by the deep recession in South Africa induced by a fall in commodity prices, the containment measures, weather-related events, and the structural issues related to public utilities.
GDP growth in West Africa is projected to contract to 2.0 percent in 2020, dropping 6 percentage points in the baseline scenario from the 4 percent growth projected in the pre-COVID–19 outlooks.
The countries most affected are Nigeria (–4.4 percent) due to the fall in oil prices and containment measures, Cabo Verde (–4 percent) due to the cessation of tourism, and Liberia (–2.5 percent) due to the crash in export demand and timber prices.
In Central Africa, economic activity is expected to contract by 2.5 percent. The forecast is driven largely by the more than 9 percent contraction in Equatorial Guinea and contractions in the Democratic Republic of Congo and Gabon, all oil exporters that will be hurt by the collapse in oil prices.
GDP in North Africa is projected to contract to –0.8 percent, down by 5.2 percentage points from the 4.4 percent growth projection in the pre-COVID–19 outlooks.
Apart from Egypt whose growth is projected at 2.2 percent which has a different calendar year and depends on several economic sectors, had robust foreign exchange buffers, and was implementing strong economic reforms before the crisis—all the countries in the region are projected to fall into recession in 2020, with Libya (–25.4 percent) and Algeria (–4.4 percent) falling farthest due to their exposure to oil price fluctuations, while Tunisia (–3.4 percent) and Morocco (–3.3) will be affected by the fall in tourism.
Africa’s five largest economies—Algeria, Egypt, Morocco, Nigeria, and South Africa account for a large portion of the recession in the continent. The projected recessions in Nigeria and South Africa alone account for more than half of the contraction in 2020.
“The overall contraction would have been deeper if not for the counteracting effect of Egypt, which is projected to maintain a growth of 2.2 percent in the baseline scenario, and other non-resource-intensive economies such as Rwanda (4.2 percent) and Senegal (2.8 percent)”.
