- The continent’s economy will decline by 3.3 per cent this year, the region’s first recession in 25 years.
- Nigeria and South Africa's economies to drop by 6.1 and 17.1% respectively
Coronavirus is threatening to push 40 million people in Africa into extreme poverty, eroding development gains of the past decade, World Bank has said.
In its The global lender revealed this in the latest Africa’s Pulse report released Thursday, saying the continent’s economy will decline by 3.3 per cent this year, the region’s first recession in 25 years.
Titled ‘Charting the way to recovery’, the report indicates that while the health consequences of the Covid-19 have been less devastating than expected, the combination of domestic lockdowns and related spillovers from the global recession significantly impacted economic activity.
''The road to recovery will be long and arduous—particularly as the region’s economic future remains uncertain amid concerns of a second wave of Covid-19 infections,’’ it says in the report.
In Nigeria and South Africa, the region’s two largest economies, growth declines were particularly pronounced, with sharp drops by 6.1 percent and 17.1 percent year-on-year, respectively.
Amid the significant economic declines, the analysis recommends governments look to policies African countries need to move toward productivity-driven growth, and create more, better and inclusive jobs.
Similar sentiments were recently expressed by the International Monetary Fund (IMF) which asked governments to invest one per cent of their GDP in public in order to attain a 2.7 per cent growth in economy in next two years.
Pulse recommends improvements in digital infrastructure and business models, digital skills and literacy, as well as more effective regulation to expand digital infrastructure and make connectivity affordable, reliable and universal.
''These measures have been complemented by actions to facilitate network expansion and adopt new technologies, such as Google Loon in Kenya and Mozambique, and the boosting of internet efficiency in Ghana,’’ the report says.
According to World Bank vice president for Eastern and Southern Africa Hafez Ghanem, countries like Angola and Ethiopia have accelerated reforms during this time, ensuring that they are poised for growth when the threat of the pandemic has subsided.
“There’s no escaping the economic impact that Covid-19 has had on the sub-region, but accelerating reforms is one way to be in the best possible position post-pandemic,’’ Ghanem said.
In addition to recommending reconstituting of fiscal space to help governments finance programs that will stimulate economic recovery, World Bank has recommended spatial integration policies to foster agricultural productivity.
It says that boosting agriculture productivity, and improving living conditions in rural areas, including food security, will play a critical role.
It added that scaling up infrastructure spending to invest across urban and rural areas, particularly, expanding access to basic infrastructure services.