The World Bank says it expects economic activity in Sub-Saharan African countries to decline by 3.3% in 2020, the region’s first recession in 25 years.
The lender says the COVID-19 pandemic also threatens to push up to 40 million people into extreme poverty in Africa, eroding many of the development gains of the past decade.
The World Bank recommends governments seize the opportunity within the crisis to develop policies and prioritize investments that build greater resilience, boost productivity and generate jobs.
“Steady recovery in Sub-Saharan Africa after the COVID-19 pandemic requires policies that foster sustained growth and build resilience, but growth alone is not enough,” said Albert Zeufack, World Bank Chief Economist for the Africa regions.
“African countries need to prioritize now, policies and investments to create better and inclusive jobs: that’s the key to sustained, inclusive and resilient growth.”
The bank said while the health consequences of the COVID-19 pandemic have been less devastating than expected, the combination of domestic lockdowns and related spillovers from the global recession significantly impacted economic activity.
In Nigeria and South Africa, the region’s two largest economies, growth declines were particularly pronounced, with sharp drops by 6.1% and 17.1% year-on-year, respectively.
Amid the significant economic declines, the analysis recommends governments look to policies African countries need, to move toward productivity-driven growth, and create more, better and inclusive jobs.
In a report, the bank acknowledges that the road to recovery will be long and arduous—particularly as the region’s economic future remains uncertain amid concerns of a second wave of COVID-19 infections—they recommend governments aim to prioritize and support policies and investments that focus on connecting people to job opportunities, which can help end extreme poverty, particularly post- COVID-19.
The World Bank notes that the pandemic has also underscored the importance of the digital economy enabling governments, business and society in a time of lockdowns and social distancing, while recognizing government interventions to reduce the cost of devices and services, avoid disconnections for lack of payment, and increase bandwidth.
These measures have been complemented by actions to facilitate network expansion and adopt new technologies, such as Google Loon in Kenya and Mozambique, and the boosting of internet efficiency in Ghana.
Looking at the economic outlook, the lender predicts the region will rebound in 2021, however growth will vary across countries. While South Africa is expected to experience a weak recovery, overall growth in Eastern and Southern Africa region is expected to average 2.7%.
Several countries, such as Ethiopia, have started to take advantage of the opportunity to put policy reforms in place.