AfDB President, Dr Akinwumi Adesina
The African Development Bank (AfDB) yesterday disclosed that Nigeria and other African countries are expected to partially rebound next year from a pandemic-induced economic slump.
AfDB however added that the continent could still lose nearly a quarter of a trillion dollars in economic output in 2020 and 2021.
Africa has so far largely been spared the rampant infections and heavy death tolls seen in Europe and the United States. Its hardest-hit nation, South Africa, has recorded around 200,000 cases of COVID-19 and just over 3,100 deaths.
AfDB further states that, ‘‘African economies, however, have not been immune to the pandemic’s global shockwaves, with oil exporters such as Algeria, Angola, Libya, and Nigeria on track to witness the continent’s sharpest declines in economic output.
‘‘Under a scenario in which the pandemic continues into the second half of this year, the AfDB forecasts a 3.4% contraction in gross domestic product in 2020 – compared with a pre-pandemic projection by the Abidjan-based bank of growth of 3.9%.’’
The figures were included in a revision of the AfDB’s African Economic Outlook, which was originally published before the pandemic.
A partial V-shaped recovery should see growth rebound to between 2.4 and 3% next year, the bank said.
“But the projected recovery in 2021 would not make up for an estimated cumulative loss to Africa’s GDP of $173.1–$236.7 billion for 2020 and 2021 due to the pandemic,” the report said.
A rebound is threatened by risks including a potentially worsening pandemic, subdued commodity prices, volatile global financial conditions, and even natural disasters such as the locust infestations that have ravaged East Africa this year.
International Monetary Fund slashed its 2020 global output forecast last month, projecting the world’s economies will shrink 4.9%, compared to a 3.0% contraction predicted in April.
The European Commission forecast on Tuesday that the euro zone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought.
… says Poor People To Increase By 49.2m In Africa In 2021
Also, AfDB says the number of extreme poor people could increase by 34 million and 49.2 million due to the COVID-19 pandemic in 2021.
It made this known in its African Economic Outlook 2020 supplement amid coronavirus pandemic released on Tuesday.
The report indicated that the development was because the Gross Domestic Product (GDP) growth continued to fall below population growth rates.
It said Nigeria and Democratic Republic of Congo, two of Africa’s most populous countries, would record the largest increases.
It explained that it could be between 8.5 and 2.7 million respectively in the baseline scenario in 2020, and 11.5 and 3.4 million in the worst-case scenario, adding that an estimated 25 to 30 million jobs could also be lost.
The report explained that about 773.4 million Africans were employed in 2019, projected under the pre-COVID–19 assumptions to grow to 792.7 million in 2020.
According to the report, under the baseline scenario of a 1.7 percent GDP contraction, employment is projected to decline by 24.6 million jobs in 2020.
It further stated that under the worst-case scenario of a 3.4 percent GDP contraction, up to 30 million jobs could be lost.
“Between 28.2 and 49.2 million more Africans could be pushed into extreme poverty.
“Although the number of people in extreme poverty in Africa (using the 1.90 dollars international poverty line) was projected to reach 425.2 million in 2020 under the no-outbreak scenario, COVID–19 could increase it further to 453.4 million in the baseline.
“The brunt will be mostly felt by the working poor, who account for almost half of the employed.
“And the crisis would also affect the nature of surviving jobs, since wages and working hours for those in the formal sector could be downgraded.
”The number of workers switching to informal sector jobs could increase as a survival strategy to maintain incomes in the face of lockdowns and restrictions,” it stated.
National Economy
