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Sub-Saharan Africa is set to experience its first recession in 25 years, with growth projected to fall to  minus 3,3 percent in 2020 due to Covid-19, according to the World Bank.

The World Bank, in a report, said that containing the spread of the Covid-19 virus has come at a high economic cost. In Africa, the pandemic is expected to drive up to 40 million of the continent’s people into extreme poverty — essentially undoing at least five years of progress.  Gross Domestic Product per capita growth is expected to contract by nearly 6 percent.

“The road to recovery may be long, and it may be steep, but prioritising policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and inclusive recovery for African countries,” Albert Zeufack, World Bank chief economist for Africa, said in a statement accompanying the report.

The bank noted the sub-Saharan Africa’s two economic giants, South Africa and Nigeria, both registered steep falls in GDP in the second quarter of the year. SA’s economy shrank by minus 17,1 percent year-on-year, while Nigeria’s fell by  minus 6,1 percent.

“The decline in growth has been stronger among metals exporters where real GDP is expected to contract by 6 percent, partly reflecting the large drop in output in South Africa,” the bank said.

“Among oil exporters, after expanding by 1,5 percent in 2019, real GDP is projected to fall by more than 4 percent 2020, owing to contractions in Angola and Nigeria.”

In non-resource intensive countries such as Côte d’Ivoire, Ethiopia, and Kenya growth is expected to slow but will remain positive. Tourism-dependent economies, such as Cabo Verde, Mauritius and the Seychelles, meanwhile, experienced sharp contractions.

Massive investments across countries and financial support from the international community, alongside reforms, is needed to aid recovery, the World Bank said.

The bank said it would deploy US$160 billion (about R2,6 trillion at current exchange rates) in financial support over 15 months to
help more than 100 countries globally
protect the poor and vulnerable, support businesses and bolster economic recovery. – news24.com