The World Bank has released a regional economic analysis report which shows the economic fallout in Africa and the countries hardest hit post-pandemic.
The analysis highlights 3 African economies with the largest GDP contractions as shown below:
- South Africa – 17.1% GDP contraction in Q2, 2020
- Nigeria – 6.1% GDP contraction in Q2, 2020
- Angola – 4% GDP contraction in Q2, 2020
The above are major export driven economies in Sub-Saharan Africa and are expected to account for the largest economic fallout on the continent post-pandemic that will have the following effects:
- 40 million people could be driven into extreme poverty in Africa in 2020 erasing at least 5 years of progress in the fight against poverty
- Sub-Saharan Africa will experience its first recession in 25 years
- Africa will see output losses of at least $115 million in 2020
- Africa GDP expected to contract by nearly 6% due to lower domestic consumption and investment
- In East and Southern Africa, debt levels are expected to rise across countries, partly due to low growth and exchange rate depreciation
- In West and Central Africa, debt levels are projected to rise noticeably among oil exporters excluding Nigeria
- Africa’s GDP is projected to pick up to 2.1% in 2021 vs 2.4% in 2019
- 6 African countries remittances account for more than 10% of GDP which have been impacted by Covid-19
- Overall growth in Eastern and Southern Africa region is expected to average 2.7%
- The Western and Central Africa region is expected to experience an average growth of 1.4%
- The decline in growth in 2020 is expected to be larger in East and Southern Africa than in West and Central Africa
- Inflation rose steadily in Nigeria to 13.2% YoY in Q3, 2020
- Inflation eased in Ghana but remained above 10% YoY in August 2020
- Inflation remained in high double-digits in Liberia and Sierra Leone
World Bank notes:
“Africa’s road to recovery post COVID-19 will be long and steep. It must be paved with sound economic policies. Countries need to reconstitute their fiscal space to finance programs that can stimulate recovery.”
You can download the full report here titled ‘Africa’s Pulse: Charting the Road to Recovery.’
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