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AfDB predicts growth rebound in Africa by 3% in 2021

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Africa should experience a rebound in economic growth of 3% in 2021 against -3.4% in the worst case scenario for 2020 if the Covid-19 crisis is not brought under control, predicts the African Development Bank (AfDB) in the supplement to a report on “African Economic Outlook 2020”.

In a comprehensive socio-economic assessment of the impact of the pandemic, the African Development Bank notes that growth should rebound to 3% in 2021, against -3.4% in the worst case scenario for 2020, mentions a note of which APA (African Press Agency) has received a copy.

According to the supplement to the report, nearly fourty-nine million Africans could be plunged into extreme poverty because of the pandemic, particularly in West and Central Africa, where the pandemic continues to progress.

Predictions from the Bank’s African Economic Outlook supplement, published on January 30, point out that Africa’s growth was previously forecast at 3.9% in 2020 and 4.1% in 2021.

In addition, the supplement warns that growth prospects for 2021 and beyond would largely depend on the effectiveness of African governments in flattening the curve of the epidemic and policies to reopen economies.

In this context, governments and development partners must intervene in a better coordinated, more targeted and faster manner to effectively limit the repercussions of the Covid-19 crisis, notes the AfDB.

“To reopen economies, policymakers should adopt a gradual and gradual approach that carefully assesses the trade-offs between too fast a recovery in economic activity and the preservation of people’s health,” said Charles Leyeka Lufumpa, chief economist Acting and Vice President for Economic Governance and Knowledge Management at the Bank.  

Economic activities can be relaunched gradually on the basis of the risks of transmission from the various sectors, indicates the report which notes that on the clinical level, only twenty-one of the fifty-four countries of Africa have the means to cope with epidemics.

The supplement shows that the pandemic curve in Africa is gradually flattening out. However, given the inadequacies of health systems and social protection, the virus remains a threat to human life.

According to the Bank report, Africa could lose between 145.5 billion and 189.7 billion US dollars in growth in 2020.

Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank says that the Africa Economic Outlook 2020 supplement shows that for the first time in half a century, Africa would face to an economic recession due to the fallout from the Covid-19 pandemic.

This would affect progress in poverty reduction as it is estimated that 49 million Africans could be pushed into poverty, with around 30 million jobs on the verge of loss.

The institution also suggests new labor market regulation policies intended to protect employees and jobs, as well as structural policies intended to enable African economies to rebuild and  improve their resilience to future shocks.

Tourism, transport and leisure will certainly be the sectors that will take the longest to leave. Between 2017 and 2018, the tourism and travel sector in Africa grew by 5.6% (international average of 3.9%), the note continues.

According to Morsy, the supplement predicted that in the worst-case scenario, an additional fourty-nine million Africans could be pushed into extreme poverty by virtue of the pandemic. The number of people living in extreme poverty in Africa (using the international poverty line of $ 1.90) could reach 453.4 million in 2020 due to the pandemic, against 425.2 million in a scenario without pandemic .

West and Central African populations are at higher risk of falling into extreme poverty due to the pandemic, but Covid-19 could also worsen poverty in East Africa.

Confirmed cases of Covid-19 in fifty-four African countries amounted to 304,642 for 8,087 deaths reported as of June 22, 2020. But according to the note, in reality the reported figures were probably higher due to the limited testing capabilities in the most countrie.

 – APA

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