According to the African Development Bank (AfDB) on Tuesday, AFRICA is expected to partially rebound next year from a pandemic-induced economic slump, but it could still lose nearly a quarter of a trillion dollars in economic output in 2020 and 2021.
Africa has so far largely been spared the rampant infections and heavy death tolls seen in Europe and the United States. Its hardest-hit nation, South Africa, has recorded about 200,000 cases of COVID-19 and just over 3,100 deaths.
However, African economies have not been immune to the current global pandemic’s shockwaves, with oil exporters such as Algeria, Angola, Libya and Nigeria on track to witness the continent’s sharpest declines in economic output in the oil and gas sector.
According to economic indicators, if the pandemic continues into the second half of this year, it is likely Africa will greatly loose a lot of revenue.
The AfDB forecasts a 3.4 per cent contraction in the gross domestic product in 2020 – compared with a pre-pandemic projection by the Abidjan-based bank of growth of 3.9 per cent.
The figures were included in a revision of the AfDB’s African Economic Outlook, which was originally published before the pandemic.
A partial V-shaped recovery should see growth rebound to between 2.4 and 3 per cent next year, the bank said.
‘But the projected recovery in 2021 would not make up for an estimated cumulative loss to Africa’s GDP of $173.1–$236.7bn for 2020 and 2021 due to the pandemic,’ the report said.
A rebound is threatened by risks including a potentially worsening pandemic, subdued commodity prices, volatile global financial conditions and even natural disasters such as the locust infestations that have ravaged East Africa this year.
Last month, the International Monetary Fund slashed its 2020 global output forecast projecting that, the world’s economies will shrink 4.9 per cent, compared to a 3.0 per cent contraction predicted in April.
The European Commission forecast on Tuesday that the eurozone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought due to the pandemic.
But economies of various countries are steadily in holding on in order not to shrink, Ghana is currently facing difficulties on the interbank market with the Cedi trading against some major currency at a very high rate which is likely to make transactions difficult for traders. The Cedi is trading against the dollar at a selling price of Ghc.5.67 pesewas and a buying price of Ghc.5.66 pesewas.
By Amos Ekow Coffie | talksafrica.com