Sub-Saharan African economies are set to weather the economic storm induced by the COVID-19 pandemic due to a slower spread of the virus, lower mortality, strong agricultural growth and a faster-than-expected recovery in commodity prices, according to a new report released on Wednesday by the World Bank.
The report shows economic recovery will be faster for African countries that deepen reforms and embrace digital technology. The report also highlights that growth in the region is forecast to rise between 2.3 and 3.4% this year. It further shows that a second wave of COVID-19 infections could potentially drag down 2021 growth prospects.
The Future of Work in Africa: Emerging Trends report, notes many African countries have made great investments over the last year to keep their economies going despite COVID-19.
World Bank Chief Economist for Africa, Albert Zeufack, says ambitious reforms that support job creation, and digital technology will be key to boosting efforts for economic recovery across the continent. He, however, warns that the resurgence of a second COVID-19 wave pandemic together with limited fiscal support will likely pose a treat for policymakers as they continue to work toward stronger growth.
“We predict that COVID-19 will be milder than anticipated. Economic activity in 2020 in Sub Saharan Africa and that’s on the lower end of the projection range than one year ago and this is clearly better than expected, and this is due to stronger agricultural growth and also faster thane expected commodity prices,” he says.
While some countries had a significant drop in COVID-19 infections due to containment, other countries are facing an upward trend in infections. Real GDP growth for Sub-Saharan Africa in 2022 is estimated at 3.1%. Recovery is expected to vary across countries.
Non-resource-intensive countries, such as Côte d’Ivoire and Kenya, and mining-dependent economies, such as Botswana and Guinea, are expected to see robust growth this year.
“We see prospects for recovery as countries deploy measures to contain the pandemic but also to implement measures to roll out the vaccine at high speed. So growth in the region is forecast to rise between 2.3 and 3.4% in 2021 depending on how deep are the reforms of the continent,” says Zeufack.
Meanwhile, growth contraction for East and Southern Africa sub-region, in 2020 is estimated at -3%, mostly driven by South Africa and Angola, the sub-region’s largest economies. South Africa’s, economic activity in the sub-region is projected to expand by 2.6% this year and 4% in 2022.
Growth in Western and Central Africa is projected to grow at 2.1% in 2021 and 3% in 2022.