The World Bank, in its January Global Economic Prospects report, forecasts a GDP growth of 2.7% in Sub Saharan Africa. Overall, the institution states that the global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year.
Outlook for Sub Saharan Africa
Growth in the region is forecast to rebound moderately to 2.7% in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners. The resumption in activity in major advanced and emerging economies and key trading partners of the region (Europe, China, US) is chiefly underpinned by positive news on vaccine development and rollout as well as new rounds of fiscal stimulus. Expectations of a sluggish recovery in Sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity. The pandemic is projected to cause per capita incomes to decline by 0.2% this year, setting Sustainable Development Goals (SDGs) further out of reach in many countries in the region. This reversal is expected to push tens of millions more people into extreme poverty over last year and this year.
Growth in Nigeria is expected to resume at 1.1% in 2021. Activity is nevertheless anticipated to be dampened by low oil prices, OPEC quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence. In South Africa, growth is expected to rebound to 3.3% in 2021. An expectation of weak growth momentum reflects the lingering effects of the pandemic and the likelihood that some mitigation measures will need to remain in place.
The rebound is expected to be slightly stronger—although below historical averages—among agricultural commodity exporters. Higher international prices for agricultural commodities are expected to buoy activity. The recovery is forecast to be more anemic among industrial commodity exporters. Although metal prices recovered somewhat in the second half of last year, oil prices remain well below 2019 levels, weighing on oil exporters (Angola, Chad, Equatorial Guinea, Gabon, Ghana, Republic of Congo).
The latest #WBGEP2021 report projects the global economy will expand 4% in 2021—marking a return to growth after the 2020 recession. But substantial risks remain, and the recovery is expected to be subdued. https://t.co/Dm6G586i2l pic.twitter.com/VJsRvhy8sI
— World Bank (@WorldBank) January 5, 2021