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· African continent, South Africa and Nigeria, the two largest economies in the region saw output fall sharply in 2020 riding on the back of slower agriculture growth
· Per capita income also drastically came down pushing millions of people into extreme poverty
· The impact was more severe in sub-Saharan African countries, which will face a difficult trajectory of growth on account of the pandemic.
The World Bank in its Global Economic Prospects report, said that the global economy is poised to expand 4% in 2021 after contracting 4.3% in 2020. As if to give a rider, the Bank said that rapid Covid-19 action should be taken including a faster vaccination process, to facilitate global growth in 2021.
The report says that the damage to the global economy has not been much due to a number of factors including robust recovery in China and lower growth shrinkages in many countries including the developed world. The damage is much below what that was expected earlier.
Coming to the African continent, South Africa and Nigeria, the two largest economies in the region saw output fall sharply in 2020
riding on the back of slower agriculture growth. Per capita income also drastically came down pushing millions of people into extreme poverty. The impact was more severe in sub-Saharan African countries, which will face a difficult trajectory of growth on account of the pandemic.
The report says that growth in Sub Saharan Africa is expected to resume at a moderate average pace of 2 percent in 2021. In the
sub-region recovery in private consumption and investment is forecast to be slower than previously envisioned. However, export growth is expected to accelerate with the rebound in activity among major trading partners, such as Europe, China, and the US. These economies can have a better growth paradigm on account of the roll out of the vaccine to cover the entire demography faster than the rest of the world.
While the Bank says that the near term growth prospects of Africa may be uncertain, it exudes optimism that pandemic control and a speedier vaccination process could accelerate global growth to nearly 5%. However, it called upon the policy makers to put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth. The World Bank also underscored that in the longer term emerging and developing economies need to improve digital infrastructure, climate resilience, health services, and business and governance practices to handle the economic fallout and mitigate poverty caused by the pandemic.
