- The just released bi-annual Africa’s Pulse report by World Bank has forecast a deep economic recession for Sub Saharan Africa
- Africa’s Pulse Report forecast a contraction of economic activity of 3.3% in 2020
The just-released bi-annual Africa’s Pulse report by World Bank has forecast a deep economic recession for Sub Saharan Africa. The report cautions that the Covid-19 pandemic has hit hard the economic activity in sub-Saharan Africa, putting back a decade of hard-won economic progress at risk and sinking almost 40 million people into extreme poverty. The World Bank’s definition of extreme poverty is someone who earns less than $1.90 a day, or less than $700 a year. Therefore, the forecast looks worrisome.
The Report points at a wider humanitarian crisis in the making. Africa’s Pulse Report further forecast a contraction of economic activity of 3.3% in 2020.Confirming the prediction that sub-Saharan Africa would suffer its first recession in a quarter-century in 2020, the World Bank said that by the close of 2021, the region’s real gross domestic product (GDP) per capita may drop to 2007 level.
Driven by the severe output declines in South Africa and Angola, the contraction of the economy is expected to be deeper in east and southern Africa followed by west and central Africa. South Africa, the second largest economy in the region has been afflicted by political mismanagement, corruption, high inflation, weak currency etc. World bank has an estimated 8% decline of South Africa’s economy. The oil economy of Angola, the third-largest economy in the region was hit by the collapse in oil prices
Countries dependent on tourism and commodities such as Cape Verde, Mauritius, the Republic of Congo, Zimbabwe, Botswana, the Seychelles and South Sudan marked a significant decline.
The World Bank added that though Sub-Saharan Africa’s real GDP growth is expected to pick up to 2.1% in 2021, against the 2.4% rate achieved in 2019 and below population growth. The Bank predicts a contraction of per capita GDP by more than 6%.
