COVID-19: World Bank Projects Record -2.8% Economic Contraction in Sub-Saharan Africa

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SWITZERLAND, JUNE 09 – The World bank has projected that economic activity in the Sub-Saharan Africa region is on course to contract by 2.8% in 2020, the deepest on record.

Also, according to the international lender, per capita GDP is anticipated to fall even more sharply, likely pushing millions in the region back into extreme poverty.

This is contained in the World Bank’s new Global Economic Outlook for Sub-Saharan Africa, released on Monday and seen by Today’s Echo correspondent.

“Sub-Saharan Africa has been ravaged by the COVID-19 pandemic, and economic activity collapsed in the first half of this year. The pandemic has taken a heavy human and economic toll, causing the most serious disruption to region-wide economic activity on record,” the World Bank remarked in the opening lines of the report.

Growth could resume to 3.1% in 2021 assuming the pandemic fades in the second half of the year, that domestic outbreaks of the virus follow a similar path, and that growth in major trading partners rebounds.

Sub-Saharan Africa faces daunting hurdles to contain COVID-19 given weak health care capacity, lack of access to basic sanitation, and the prevalence of informal economic activity across much of the region.
The economy of Nigeria is expected to shrink by 3.2% this year, given the collapse in oil prices, which represent 80% of the country’s exports, about a third of banking sector credit, and half of government revenues. South

Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century, as stringent but necessary containment measures curtail economic activity. Economic activity among commodity importing economies is anticipated to shrink this year despite lower oil prices, as international travel restrictions weigh on tourist visits. Industrial commodity exporters’ GDP is similarly anticipated to contract in 2020 as domestic disruptions are compounded by low prices for oil and

Agricultural commodity exporters are also expected to experience a collapse in economic activity this year despite being somewhat insulated from commodity price declines, as foreign direct investment and tighter financial conditions delay investment.

However, Sub-Saharan Africa’s economic contraction of 2.8% is still much lesser than the world economy’s projected contraction of 5.2%.

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