Africa could see a recovery in economic growth in 2021 if regional governments manage the COVID-19 infection rate well, the African Development Bank said in its latest forecasts released Tuesday. The bank has also warned that the continent’s gross domestic product could contract up to -3.4 percent if the coronavirus pandemic continues into the second half of 2020.
Growth is now projected to rebound to 3 percent next year from the worst-case scenario predictions where GDP losses in 2020 could amount to $189.7 billion from the pre-COVID-19 estimated GDP of $2.59 trillion. Losses for 2021 is expected to range from $27.6 billion to $47 billion while cumulative GDP losses could be between $173.1 billion and $236.7 billion in 2020-2021.
The subdued outlook is contained in the bank’s supplement to the African Economic Outlook that was released January 30, in which the regional development bank had said Africa was to grow by 3.9 percent in 2020 and 4.1 percent in 2021. Much of the growth forecasts for next year and beyond would depend largely on African governments’ effectiveness in flattening the curve of the outbreak and policies to reopen economies, the bank warned.
“To reopen economies, policymakers needed to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population,” said Charles Leyeka Lufumpa, Acting Chief Economist and VP at AfDB. “Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors.”
While the spread of the virus in Africa depends largely on the preparedness of countries to separate and treat infected patients, only 21 of 54 African countries are clinically prepared to deal with epidemics, the supplement said.
The curve of the pandemic in Africa was flattening gradually, the bank said but COVID-19 remains a serious threat to lives and livelihoods. The socioeconomic fallout of the pandemic remains a serious concern given weak healthcare systems and limited social protection even as the continent faces other regional threats that include locust swarms in East Africa, and extreme climate events.
An estimated 49 million Africans could be pushed into poverty, with about 30 million jobs on the verge of disappearing, according to AfDB Director Hanan Morsy, who warned that policymakers need to act fast to alleviate the impact of the crisis on vulnerable groups through “well-targeted” social safety net measures.
Confirmed cases of COVID-19 in Africa stood at 509,584, with 12,000 deaths and 247,207 recoveries as of July 8, 2020. But reported figures are likely to be higher in reality because of limited testing capabilities in most countries, the report said, calling for urgent policy interventions to mitigate the impact of the pandemic.