16 October 2020
Last update on Friday, October 16, 2020 At 8:30 AM
According to the World Bank, the covid-19 pandemic could push 40 million people in Africa into extreme poverty. The institution now expects a recession of -3.3% for sub-Saharan Africa, much more than the -2.8% announced in June.
Due to the covid-19 pandemic, up to 40 million Africans could fall into extreme poverty in 2020. This is what the World Bank announced on Thursday, October 8, at the launch of its new perspectives for the African economy.
For the institution, this would amount to the undoing of at least five years of progress in the fight against poverty in Africa. This underperformance could be induced by the consequences of the pandemic on African economies, which should see their growth in recent years be halted in 2020.
According to the World Bank, growth in sub-Saharan Africa is expected to fall to -3.3% in 2020; which would plunge the region into its first recession in 25 years. This is much more than the -2.8% recession announced by the Bank in June.
It is now estimated that the substantial slowdown in economic activity will cost the region at least $ 115 million in lost production this year. GDP per capita growth is expected to contract by around 6.0%, “partly due to lower domestic consumption and investments induced by containment measures aimed at slowing the spread of the coronavirus”.
However, not all countries should be affected in the same way. The Bretton Woods institution indicates that countries dependent on exports of materials such as hydrocarbons and precious metals will be the most economically impacted by the crisis. In contrast, for “resource-intensive” countries, the decline in growth in 2020 is expected to be moderate. Several of them such as the Ivory Coast, Ethiopia and Kenya should also maintain positive growth due to the slightly more diversified nature of their economy.
“As covid-19 continues to exert significant pressure on the economies of West and Central Africa, it is important that policymakers create the infrastructure necessary for a rapid recovery,” said Ousmane Diagana, vice president of the World Bank for West and Central Africa. He added: “Strong policies create the essential cornerstone for a sustainable and inclusive recovery and better resilience to shocks.”
Source Ecofin Agency
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