AFRICA – The African Economic Outlook, an African Development Bank publication, has projected that Africa’s economic growth may rebound to 3% in 2021 from a -3.4% in the worst-case scenario for 2020.
The African Economic Outlook supplement however, 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.
The supplement noted that the curve of the pandemic in Africa was flattening gradually.
However, COVID-19 remains a serious threat to lives and livelihoods, given weak healthcare systems and limited social protection.
The continent also remains vulnerable to other regional threats such as the locust swarms that have struck East Africa, as well as to extreme climate events.
“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,” said Charles Leyeka Lufumpa, Acting Chief Economist, at the African Development Bank.
Lufumpa who is also AFDB’s Vice President for Economic Governance and Knowledge Management advised that, “Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors”.
Under projected scenarios for contraction of growth, Africa could lose between $145.5 billion and $189.7 billion of GDP in 2020, according to the publication.
The pandemic and its aftermath, according to the African Development Bank publication, could push an additional 49 million Africans into extreme poverty.
The African Development Bank also noted that the West and Central Africa stand to be worst hit.
To cushion Africa from the adverse effects of the COVID19 pandemic, the Africa Economic Outlook supplementary report, called for a well-sequenced and multipronged response, involving a public health response to contain the spread of the virus and minimise fatalities.
The report also noted that the response to the COVID19 pandemic should also involve a monetary policy response to ease liquidity constraints and solvency risks, and a fiscal response to cushion the economic impacts of the pandemic on livelihoods and to assist businesses.
Other proposed interventions included in the African Economic Outlook report include: labour market policies to protect workers and their jobs, and structural policies to enable African economies to rebuild and enhance their resilience to future shocks.
Containing the spread of the virus in Africa depends largely on the preparedness of countries to separate and treat infected patients, the supplement stated, noting that only 21 out of 54 African countries are clinically prepared to deal with epidemics.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE
