Africa Economy Industry and Commerce Report

Africa’s growth stands to rebound to 3% in 2021

Africa’s growth stands to rebound to 3 per cent in 2021 said the African Development Bank in its African Economic Outlook 2020 supplement.

According to updated forecasts from the African Development Bank, economic growth in Africa could rebound in 2021, provided that governments manage the COVID-19 infection rate well.

In the bank’s socio-economic assessment of the pandemic’s impact, growth is now projected to rebound to 3 per cent in 2021 from -3.4 per cent in the worst-case scenario for 2020.

In January this year, the bank released a supplement to its African Economic Outlook which forecast Africa’s growth at 3.9 per cent in 2020 and 4.1 per cent in 2021.

The growth outlook for 2021 and beyond would largely depend on African governments’ effectiveness in flattening the curve of the pandemic and policies to reopen economies the supplement cautioned.

Also read: Manufacturers see first growth in 10 months in South Africa

“To reopen economies, policymakers needed to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population. Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors. “said Charles Leyeka Lufumpa, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management, at the African Development Bank.

The supplement also noted that the spread of the virus in Africa depends largely on the preparedness of countries to separate and treat infected patients. It also noted that only 21 out of 54 African countries are clinically prepared to deal with COVID-19 epidemics.

COVID-19 remains a serious threat to lives and livelihoods, given limited social protection and weak healthcare systems. The continent also remains vulnerable to other threats such as the locust invasions and extreme climate events.

According to the supplement, in 2020 under projected scenarios for the contraction of growth, Africa could lose between US$145.5B and US$189.7B of GDP.

“The African Economic Outlook 2020 Supplement shows that for the first time in the last half-century, Africa would be facing an economic recession as a fallout of the COVID-19 pandemic. This would affect the gains achieved in poverty reduction as an estimated 49 million Africans could be pushed into poverty, with about 30 million jobs at the verge of disappearing. Policymakers need to act fast to alleviate the impact of the crisis on vulnerable groups through well-targeted social safety net measures.” said Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank.

Source: The Exchange

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: