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Covid-19: Africa’s economic growth estimated at 3% in 2021

According to a report published by the African Development Bank (AfDB), Africa is likely to experience a 3% rebound in economic growth in 2021 if governments manage to stem the spread of the Covid-19 pandemic.

In a comprehensive socio-economic assessment of the impact of the pandemic, the AfDB said that growth should rebound to 3% in 2021, against -3.4% in the worst-case scenario for 2020. Indeed, these forecasts are contained in a supplement to the Bank’s African Economic Outlook published on January 30 stating that Africa’s growth was forecast to be 3.9% in 2020 and 4.1% in 2021.

The supplement warns that growth prospects for 2021 and beyond depend largely on the effectiveness of African governments in flattening the curve of the epidemic and on policies to reopen economies. He also points out 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 and livelihoods.

Hanan Morsy, Director of the AfDB’s Macroeconomic Policy, Forecasting and Research Department, says the Africa Economic Outlook 2020 Supplement shows that for the first time in half a century, Africa will face a recession economic due to the fallout from the Covid-19 pandemic. This would affect progress made in poverty reduction as 49 million Africans could be plunged into poverty, particularly in West and Central Africa, with around 30 million jobs on the brink of extinction.

“To reopen the economies, policy makers should adopt a gradual and gradual approach which carefully assesses the trade-offs between the too rapid restart of economic activity and the preservation of people’s health. Said Charles Leyeka Lufumpa, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management at the AfDB, adding that economic activities can be relaunched gradually based on the risks of transmission from different sectors. .

For his part, the executive director of the Consortium for Economic Research in Africa and former governor of the Central Bank of Kenya, Njuguna Ndung’u, believes that the additional economic prospects in Africa 2020 is a very important and useful policy tool for African countries. It will be useful now and in the future, as it gives Africa important short, medium and long-term strategies.

AfDB suggests that interventions across the continent need to be fully articulated and include several components, including public health measures to contain the spread of the virus, monetary policy to mitigate the effects of insufficient liquidity and the risks insolvency, as well as budgetary measures to limit the economic impact of the pandemic on livelihoods and to assist businesses.

The institution is also suggesting new labor market regulation policies to protect workers and jobs, as well as structural policies to help African economies rebuild and improve their resilience to future shocks. Tourism, transport and leisure will certainly be the sectors that will take the longest to leave.