Sub-Saharan Africa economy to shrink 3.3% - World Bank

JOHANNESBURG - Sub-Saharan Africa’s economy is expected to contract by 3.3% in 2020 due to the fallout from the Covid-19 global pandemic, the region’s first recession in 25 years, the World Bank said on Thursday.

In the latest edition of its Africa’s Pulse publication, the bank said the pandemic -- which has seen more than 1.5 million people in Africa infected out of over 36 million in the world -- could also drive up to 40 million people into extreme poverty on the continent, erasing at least five years of progress in fighting poverty.

With over a million reported cases across the continent, the pandemic is still not under control in sub-Saharan Africa, it said, although it singled out some governments, notably Senegal and Mauritius, for acting rapidly to reduce the spread of infections.

“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,” World Bank chief economist for Africa Albert Zeufack said in a statement accompanying the report.

Highlighting the toll of the global health crisis, Nigeria’s real gross domestic contracted by 6.1% year-on-year in the second quarter of this year, the worst performance in more than a decade, while South Africa saw its real GDP slide by 17.1% year-on-year during the same period after a lockdown aimed at containing the virus largely grounded economic activity.

The economy of Angola, sub-Saharan Africa’s second largest oil producer after Nigeria, fell by 1.8% year-on-year in the first quarter.

The World Bank said the decline had been stronger among metals exporters, partly reflecting the large drop in output in South Africa. Among oil exporters, after expanding by 1.5% in 2019, GDP was projected to fall by more than four percent in 2020, owing to contractions in Angola and Nigeria. In contrast, for non-resourceintensive countries, the decline in growth in 2020 is expected to be moderate. Cote d’Ivoire, Ethiopia and Kenya are expected to slow substantially but remain positive, owing to these countries’ more diversified economies. Tourism-dependent economies like those Cabo Verde, Mauritius and the Seychelles, have experienced a sharp contraction as the coronavirus pandemic led to exceptionally weak international tourism. The World Bank said the substantial downturn in economic activity would cost the region at least US$115 million in output losses this year.

It noted that while the pandemic was not over and the persistence and spread of the virus was uncertain, African governments had started putting in place policies and programs to support an inclusive and sustainable post-pandemic recovery.

Several countries, including South Africa, Nigeria, and Ethiopia, had already begun implementing long-needed reforms in energy and telecommunications spurred by the current crisis, and 25% of African firms had accelerated the use of digital technology and increased investments in digital solutions. -