Experts on sub-Saharan Africa bank on growth between 2.3 and 3.4 percent in 2021, according to the World Bank’s latest Africa Pulse Report.Black African economy will rise from its ashes, despite the recession caused by Covid-19. In any case, this is what the latest edition of Africa’s Pulse, the World Bank’s biannual report on African economic conditions, suggests. It said in a statement received on Friday at APA that growth will increase in the range of 2.3 to 3.4 percent this year. But it will depend “on the policies adopted by the countries and the international community.”
With an infection rate about 40 percent higher than that of the first wave, the second wave of coronavirus is likely to push these predictions towards the low end. To date, the continent has recorded more than 4.3 million cases and nearly 120,000 deaths. The World Bank notes that some countries have managed to significantly reduce the spread of the virus, thanks to containment measures, while others are facing an increase in contagion.
Thanks to the “conjunction of several factors,” such as the slow progression of the virus and a low case fatality rate, many African economies “have been able to resist the turmoil” caused by the pandemic, Africa’s Pulse notes. “This is also due to the good performance of agricultural production and the faster than expected recovery in commodity prices.”
The report further emphasizes that “economic recovery will depend on the extent of reforms made by countries to support job creation, promote investment and boost competitiveness.”
“Over the past year, African countries have made significant investments to keep their economies afloat and preserve the lives and livelihoods of their people. In order to step up these efforts and pave the way for a more solid recovery across the continent, they must implement ambitious reforms that will support job creation, encourage equitable growth, protect vulnerable people and preserve the environment,” Cameroonian-born Albert G. Zeufack, World Bank Chief Economist for Africa recommends.
In addition, says Pulse, not all countries in sub-Saharan Africa will benefit from the same recovery momentum this year. Resource-poor economies, such as Cote d’Ivoire and Kenya, and in economies dependent on mining, such as Botswana and Guinea, are expected to post a solid rebound in 2021, owing to a recovery consumption and private investment driven by the return of confidence and an increase in exports.
In Eastern and Southern Africa, growth is expected to decline to -3 percent in 2020, weighed in particular by the modest performance of South Africa and Angola, the two locomotives in the sub-region. Outside of these two countries, economic activity is expected to rebound 2.6 percent in 2021 and 4 percent in 2022.
2022, another year
In West and Central Africa, growth contracted by 1.1 percent in 2020, higher than forecast for October 2020, thanks to a less pronounced than expected decline in activity in the second half of the year in Nigeria, the first economy in the sub-region. Real GDP in West and Central Africa is expected to grow 2.1 percent in 2021 and 3 percent in 2022.
Thus, the Bretton Wood institution says, real GDP growth for 2022 is estimated at 3.1 percent. In most countries in the region, the level of activity at the end of 2021 will be well below the forecasts made before the pandemic struck. This situation “could aggravate the lasting adverse consequences of the health crisis on the standard of living of the inhabitants.”
Apart from investments in human capital and reforms encouraging an increase in inclusive productivity and competitiveness, the report notes that the reduction of the debt burden will allow African countries “to free up public resources to invest in particular in education, health and infrastructure.”
According to Africa’s Pulse, the next 12 months “will be decisive” in enabling the African Continental Free Trade Area (AfCFTA) to fully play its role in accelerating the integration of African countries into regional and global value chains.