Adedapo Adesanya
By Adedapo Adesanya
The Sub-Saharan region in Africa will fall into recession in 2020 for the first time since 1995, the World Bank said in a new forecast released on Thursday.
The Bretton Woods institution noted that this will be driven primarily by the coronavirus pandemic which could shrink the region’s economy by as much as 5.1 percent.
In the report, Africa’s Pulse, the global lender said the region’s economy will contract between 2.1 percent to 5.1 percent against a growth of 2.4 percent recorded in 2019.
It was also revealed that the coronavirus will cost sub-Saharan Africa $37 billion to $79 billion in output losses this year due to trade and value as most countries are using lockdowns to control the virus spread.
Real Gross Domestic Product (GDP) growth was projected to fall sharply particularly in the region’s three largest economies – Nigeria, Angola, and South Africa.
The World Bank said that Nigeria and other oil exporting countries would also be hit by the impact of the pandemic, adding that growth would possibly weaken substantially in the West African Economic and Monetary Union (WAEMU) and the East African Community (EAC) due to weak external demand, disruptions to supply chains and domestic production.
The region could also face a possible food security crisis with agricultural production projected to contract between 2.6 percent and 7 percent as a result of trade blockages.
“Food imports would decline substantially (as much as 25 percent or as little as 13 percent) due to a combination of higher transaction costs and reduced domestic demand,” the bank said in a statement.
The World Bank said that sub-Saharan Africa could need an economic stimulus of as much as $100 billion to help it recover during this grim period.
It called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they can use the money to halt the spread of the disease and tackle its financial impact.
The package should include temporary debt relief amounting to $44 billion, the World Bank added.
The World Bank further called on African policymakers to focus on saving lives and protecting livelihoods by spending money to strengthen health systems and taking quick actions to minimise disruptions in food supply chains.
It also recommended social protection programmes, including cash transfers, food distribution and fee waivers, to support citizens, especially those working in the informal sector.
Africa has close to 11,000 confirmed COVID-19 cases and has recorded 562 deaths with 1,149 recoveries.
