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Nigerian Economy, Others May Lose $189.7bn in 2020

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By Adedapo Adesanya

The Nigerian economy and others on the African continent could lose $189.7 billion in 2020 as a result of the COVID-19, the African Development Bank (AfDB) in its latest forecast has said.

The continent’s economic growth could, however, rebound in 2021, provided that governments manage the COVID-19 infection rate well, according to the updated forecasts titled The African Economic Outlook 2020 Supplement from the Abidjan-based lender released on Tuesday.

Under projected scenarios for a contraction of growth, Africa could lose between $145.5 billion and $189.7 billion of GDP in 2020, according to the publication.

In a comprehensive socio-economic assessment of the pandemic’s impact, the bank said growth was now projected to rebound to 3 percent in 2021 from -3.4 percent in the worst-case scenario for 2020 as long as governments and development partner respond in a more coordinated, targeted, and rapid manner to be effective in limiting impact.

The figures were included in the revised AfDB’s African Economic Outlook, which was originally published before the pandemic.

The bank said the pandemic could see an additional 49 million Africans pushed into extreme poverty by the pandemic and its aftermath, adding that West and Central Africa stand to be worst hit.

The updated report cautioned that the growth outlook for 2021 and beyond would depend largely on African governments’ effectiveness in flattening the curve of the outbreak and policies to reopen economies.

Speaking on this, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management, Mr Charles Lufumpa, said, “To reopen economies, policymakers needed to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population.

“Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors,” he added.

On her part, Ms Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at AfDB said “The African Economic Outlook 2020 Supplement shows that for the first time in the last half-century, Africa would be facing an economic recession as a fallout of the COVID-19 pandemic.

“This would affect the gains achieved in poverty reduction as an estimated 49 million Africans could be pushed into poverty, with about 30 million jobs at the verge of disappearing.  Policymakers need to act fast to alleviate the impact of the crisis on vulnerable groups through well-targeted social safety net measures.”

AfDB recommended that to reopen economies, policymakers needed to follow a phased and incremental approach that carefully evaluated the trade-offs between restarting economic activity too quickly and safeguarding the health of the population.

It also suggested that countries must build public trust and buy-in and address structural bottlenecks that make the continent more vulnerable to future shocks.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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