Sub-Saharan Africa’s Gross Domestic Product (GDP) will encounter contraction of between 2.1% and 5.1% in 2020 and slide into recession, its worst show in a quarter of a century, Washington-based World Bank reported Thursday morning.
COVID-19, the poverty-prone continent’s latest nightmare, has largely resisted governments’ ambition to tame it, monumentally crippling business through lockdowns in most African countries and triggering a severe health emergency.
“The COVID-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” said Hafez Ghanem, World Bank Vice President for Africa.
A tally by Reuters, derived from government statements and WHO figures, observes that there are “at least 10,956 confirmed cases of the novel coronavirus,” 562 fatalities and 1,149 recoveries.
World Bank’s Africa’s Pulse report says sub-Saharan Africa risks between $37 billion and $79 billion in output losses this year owing to disruption trade and value chain among other reasons.
The pandemic is responsible for the embargo on air passenger travel across several countries in Africa, a development having adverse implications for related sectors such as tourism.
The World Bank projected that sub-Saharan Africa’s largest economies – Nigeria, Angola and South Africa – will have their GDPs worst hit by the looming recession of all the economies in the region.
“Oil exporting-countries would also be hard-hit; while growth would likely weaken substantially in the West African Economic and Monetary Union, and the East African Community due to weak external demand, disruptions to supply chains and domestic production,” Reuters reported.
The World Bank also projected that the coronavirus outbreak would cause an African food crisis that would reduce agricultural production by between 2.6% and 7% in case trade blockages happen.
“Food imports would decline substantially (as much as 25% or as little as 13%) due to a combination of higher transaction costs and reduced domestic demand.”
Cesar Calderon, World Bank’s lead economist and lead author of the report, said “there will be need for some sort of debt relief from bilateral creditors to secure the resources urgently needed to fight COVID-19 and to help manage or maintain macroeconomic stability in the region.”
The World Bank enjoined African policymakers to concentrate attention on protecting lives and livelihoods by supporting health systems with funding and making reforms that will reduce hindrances in food supply chains.
Similarly, it suggested palliatives ranging from food distribution and cash transfers to fee waivers to give succour to citizens, particularly those in the informal sector.