The bank states in an evaluation report that the region’s economy will suffer as much as -5.1 per cent shrink in 2020.
S ub-Saharan Africa will be hit by economic recession this year with the drop going down to as much as -5.1 per cent, a World Bank report has predicted. “Growth in Sub-Saharan Africa has been significantly impacted by the ongoing coronavirus outbreak and is forecast to fall sharply from 2.4 per cent in 2019 to -2.1 to -5.1 per cent in 2020,” the first recession in the region over the past 25 years, according to the latest Africa’s Pulse, the World Bank’s twice-yearly economic update for the region.
The report points to COVID-19 effects such as trade and value chain disruption, reduced foreign financing flows from remittances, tourism, foreign direct investment, foreign aid, combined with capital flight; and through direct impacts on health systems, and disruptions caused by containment measures and the public response. The COVID-19 crisis also has the potential to spark a food security crisis in Africa, with agricultural production potentially contracting between 2.6 per cent in an optimistic scenario and up to 7 per cent if there are trade blockages. “The immediate measures are important but there is no doubt there will be need for some sort of debt relief from bilateral creditors to secure the resources urgently needed to fight COVID-19 and to help manage or maintain macroeconomic stability in the region,” said Cesar Calderon, Lead Economist and Lead author of the report. Already, the International Monetary Fund as reported by the BBC, has granted a debt service relief of six months to some 19 African countries excluding Cameroon and many other big economies of the continent, to enable them channel resources to combat against the pandemic. French President, Emmanuel Macron has also announced the cancellation of debts for African countries in line with World Bank recommendation. BBC quotes African Union report as saying that nearly 20 million jobs on the continent «are threatened with destruction» The World Bank is deploying up to USD 160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery as Albert Zeufack, World Bank’s chief economist for Africa says “Africa alone will not be able to contain the disease which has recorded more than 11,000 confirmed cases and 570 deaths across Africa. Cameroon, according to official figures has confirmed more than 800 cases.