KENYA – The World Bank has forecast Kenya’s economy to rebound at 6.9% in 2021, the highest growth in the continent.
In its Global Economic Prospects for this year, World Bank however revises the expectations downwards to 5.75% for 2022.
At a distant 6.9%, Kenya’s rebound is expected to be slightly stronger, although below historical averages, among agricultural commodity exporters.
Other countries that are expected to register notable growths include Rwanda and Botswana at 5.7% each, Tanzania, Cabo Verde, Guinea, and Cote d’Ivoire at 5.5 % each.
In East Africa, Uganda is expected to grow at 2.8%, Burundi 2% while South Sudan is projected to contract 3.4%.
Overall, the Sub-Saharan economies forecast for 2021 has been averaged at 2.7%.
“Growth in the region is forecast to rebound moderately to 2.7% in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners,” read the statement.
At the same time, expectations of a sluggish recovery in Sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity.
“Growth in the region is forecast to rebound moderately to 2.7% in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners”
According to the global lender, the pandemic is projected to cause per capita incomes to decline by 0.2% this year, setting Sustainable Development Goals (SDGs) further out of reach in many countries in the region.
The reversal is expected to push tens of millions more people into extreme poverty over last year and this year.
The lender however warned that growth in major trading partners could fall short of expectations and a widescale distribution of a COVID-19 vaccine will likely face many hurdles, including poor transport infrastructure and weak health systems capacity.
“Such constraints, compounded by natural disasters such as recent devastating floods and rising insecurity, particularly in the Sahel, could delay recovery. Government debt in the region has increased sharply to an estimated 70% of GDP last year, elevating concerns about debt sustainability in some economies,” it added.
At the same time, the global lender said that banks were at risk in facing sharp increases in non-performing loans as companies struggle to service their debt due to falling revenues.
Lasting damage of the pandemic could depress growth over the long term through the chilling effects of high debt on investment, the impact of lockdowns on schooling and human capital development, and weaker health outcomes.
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