Sub- Saharan African economies to contract 3.3%

THE CORONAVIRUS crisis is expected to drive a 3.3 percent contraction in sub- Saharan African economies this year and could push 40 million people into extreme poverty, the World Bank said yesterday.

The Washington- based lender said growth in the region would recover next year, with economies growing by 2.1 percent, below last year’s growth of 2.4 percent.

“The Covid- 19 pandemic has taken a large toll on economic activity in sub- Saharan Africa, putting a decade of hard- won economic progress at risk,” the bank said.

Apart from South Africa, the region appears to have escaped the worst of the health crisis, accounting for 3.4 percent of global infections and 2.5 percent of deaths, but the World Bank warned of potential risks from the virus.

“Great uncertainty surrounds the scale and trajectory of the pandemic in the region,” it said, citing the experience of European nations and the US, which are going through a second wave of infections.

The pandemic is expected to regress the economic output per person to 2007 levels by the end of next year, the bank said, and disrupt learning for 235 million students.

This year’s economic growth is expected to be hit by the lockdowns put in place by governments to curb the spread of the virus, and the impact of the global slowdown.

“Disruptions in the tourism industry and lockdowns will cause substantial slowdowns in Ethiopia, Kenya and the island nations,” the World Bank said.

Economies that are not overly reliant on commodities, such as Ivory Coast, Ghana and Senegal, will be spared from steep contractions, thanks to fairly robust outputs in their farming sectors, the bank said.

Governments in the region should take steps to boost their capacity to recover from the impact of the crisis, the World Bank said.

“Countries need to reconstitute their fiscal space to finance programmes that can stimulate recovery, improve debt management and fight corruption,” the lender said.