By Adedapo Adesanya
As the world faces an imminent global recession due to disruptions brought about by the coronavirus pandemic, a new Reuters poll has suggested that Sub-Saharan Africa will face a 3.5 per cent contraction this year.
Following months of lockdowns, which have muted economic activity, a Reuters poll taken in the past week suggested the region will contract that much in 2020 but also projected that it will bounce back to around 3.5 per cent in 2021.
According to Reuters, “Some countries have begun relaxing restrictions but virus cases are still increasing, unlike in many developed countries that have started to show signs of recovery, so the uncertainty meant the range of forecasts for next year was wide – between flatlining and 4.8 per cent growth.”
Africa’s largest economy, Nigeria is expected to contract 3.7 per cent this year but will see a 2.0 per cent growth next year.
Meanwhile, South Africa which has reported the most cases in Africa is expected to contract by 8.0 per cent this year, adding to its recession woes. But it is expected to grow by 3.5 per cent next year.
Kenya, which is east Africa’s biggest economy, is expected to have a lacklustre performance this year with no growth. It considers this a poor outcome since Kenya averaged around 6 per cent annual growth in the past 10 years.
However, Ghana, one of the continents oil exporters, is still expected to grow, expanding by 1.9 per cent this year and 4.2 per cent in 2021.
Reuters quoted Barclays economist, Mr Michael Kafe, as saying that “Despite the obvious downside risks from lower oil prices and headwinds from COVID-19, we believe Ghana has a decent growth outlook and reasonably comfortable external sector metrics relative to other African oil exporters.”
“The fallout from COVID-19 and associated lockdown mean GDP growth is likely to be weak this year.
“However, unlike other African oil exporters such as Angola, Gabon and Nigeria, where GDP growth is likely to contract this year, we expect Ghana to post positive GDP growth,” he added.
When the International Monetary Fund (IMF) gauged the early impact of the coronavirus, it described it as a crisis like no other, emphasising that there is substantial uncertainty about its impact on people’s lives and livelihoods.
According to the global lender, a lot depends on the epidemiology of the virus, the effectiveness of containment measures, and the development of therapeutics and vaccines, all of which are hard to predict.
In addition, many countries now face multiple crises—a health crisis, a financial crisis, and a collapse in commodity prices, which interact in complex ways.
Dipo Olowookere