Africa’s economy will fall by 4.1% this year, recover by 5% in 2021 –UN

The United Nations (UN) has forecasted that Africa’s economy will slow by 4.1 per cent this year and rebound by 5% in 2021 as the coronavirus pandemic weighs on commercial activities.

The UN Economic Commission for Africa made the disclosure in a report it issued on Tuesday titled Innovative Finance for Private Sector Development in Africa, stating that the continent will require $44 billion for the testing, personal protective equipment for frontline medical personnel, equipment and treatment of the coronavirus.

According to the UN, Africa’s economic rejuvenation would hinge on effective policies to fight the pandemic.

The UN estimated that the pandemic would plunge between 5 to 29 million people into acute penury relative to a baseline 2020 African growth scenario.

It projected a financing gap of $2.5 trillion for all emerging and developing countries and $200 billion to $1.3 trillion for Africa and enjoined the continent to invest in human capital to bridge the gap.

Read also: Nigeria’s economy grows faster than South Africa’s –IMF

The gap is forecasted to reach $19.5 trillion by 2030 due to Africa’s population growth of 43 per cent over 2015-2030.

The UN noted that Africa had the second-fastest growing economy in the world 2019, however, the pandemic would impact growth between 1.8% and -4.1% this year.

It called for more banking reforms to minimise the effects of monetary crisis and also to stimulate private sector-led investment in the continent through stronger equity and debt capital.

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