Economy: Modest economic rebound forecast for region after riding out Covid-19 shocks

Sub-Saharan Africa economic growth is expected to be uneven in 2021 as a result of the second and third wave of the Covid-19 pandemic which is shooting down growth projections.

This is according to latest World Bank’s biannual economic analysis for the region titled The Future of Work in Africa: Emerging Trends in Digital Technology Adoption.

The growth is expected to rise between 2.3 and 3.4 percent in 2021, depending on the policies adopted by countries and the international community.

Economic growth in the region was estimated to have contracted by two percent in 2020, closer to the lower band of the forecast in April 2020. Recovery prospects are strengthening amid actions to contain new waves of the pandemic and speed up vaccine rollout.

Vaccine nationalism

The growth depends on the countries’ commitment in adhering to health regulations and how they will deepen reforms that encourage investment, create jobs and enhance competitiveness.

World Bank chief economist for Africa Albert Zeufack raised concerns over inability of African countries to access vaccines, which might overturn the projected growth if some rich countries continue to hoard vaccines, as Africa receives only 10 per cent of its population needs.

“Depending on reforms on the continent and support from international community, sub-Saharan Africa’s recovery is expected to vary across countries. Non-resource-intensive countries, such as Côte d’Ivoire and Kenya, and mining-dependent economies, such as Botswana and Guinea, are expected to see robust growth in 2021, driven by a rebound in private consumption and investment as confidence strengthens and exports increase,” said Mr Zeufack.

He added, “Ambitious reforms that support job creation, strengthen equitable growth, protect the vulnerable and contribute to environmental sustainability will be key to bolstering those efforts going forward toward a stronger recovery across the continent.”

Growing debt distress

Mr Zeufack was concerned over the increasing number of countries in debt distress as a result of failing to service their loans with some being categorised as defaulters by international lenders. He called for interventions between these countries, lenders and the international community to review loan terms.

“Debt has remained a concern and key vulnerability to many countries since they have become costly with some moving to debt default such as Zambia since they cannot afford to service their loans,” he said at the report launch.

Per region, growth contraction for 2020 is estimated at -3.0 per cent in the Eastern and Southern Africa sub-region, mostly driven by large economies such as South Africa and Angola. Excluding the two, economic activity in the sub-region is projected to expand by 2.6 percent in 2021, and 4.0 per cent in 2022.

Via

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: