WASHINGTON, October 6, 2021 – Sub-Saharan Africa is expected to emerge from the 2020 recession triggered by the COVID-19 pandemic with growth expected to increase by 3.3% in 2021. This is 1% more than forecast April 2021 according to the latest edition of Africa’s Pulse. This rebound is currently fueled by high commodity prices, a relaxation of stringent pandemic measures and the resumption of global trade, but remains vulnerable given low vaccination rates on the continent, prolonged economic damage and the slow recovery.
According to Pulse analysis, the World Bank’s semi-annual economic update for the region, growth for 2022 and 2023 will also remain just below 4%, continuing to lag behind the recovery in advanced economies. and emerging markets, and reflecting low investment in sub-Saharan Africa. .
âEquitable and broad access to effective and safe COVID 19 vaccines is essential to save lives and strengthen Africa’s economic recovery. Faster vaccine deployment would accelerate the region’s growth to 5.1% in 2022 and 5.4% in 2023, as more containment measures are lifted, boosting consumption and investment, âsaid Albert Zeufack , Chief Economist for Africa at the World Bank.
The analysis shows that the current speeds of economic recovery in the region are varied, with the three largest economies, Angola, Nigeria and South Africa, expected to grow by 0.4%, 2.4% and 4.6%. Excluding South Africa and Nigeria, the rest of sub-Saharan Africa is rebounding faster to a 3.6% growth rate in 2021, with non-resource-rich countries like CÃ´te d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0%, respectively.
A positive trend, according to the report’s authors, is that African countries have seized the opportunity of the crisis to encourage structural and macroeconomic reforms. Several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, the reform of fuel subsidies in Nigeria and the opening of the telecommunications sector to the private sector in Ethiopia.
Moreover, thanks to prudent monetary and fiscal policies, the region’s budget deficit, at 5.4% of GDP in 2021, is expected to narrow to 4.5% of GDP in 2022 and to 3% of GDP in 2023. However, fiscal discipline, combined with space budget restraints, has prevented African countries from injecting the level of resources needed to launch a vigorous policy response to COVID-19.
In addition to growing fiscal pressures and rising debt levels as they implement measures for a sustainable and inclusive economic recovery, countries in sub-Saharan Africa are also facing the worsening impacts of climate change. The authors of Pulse advise that just as countries have used the crisis to introduce reform measures, they should also harness this opportunity to make sustainable and resilient transitions to low-carbon economies that can deliver long-term benefits. term in the form of reduced environmental risks as well as new opportunities for economic development.
The reports highlight Africa’s unique context of low basic development, pre-existing climate vulnerabilities, limited access to energy and high dependence on climate-sensitive sectors, which pose challenges but also offer opportunities to transform the economy and create jobs. Private companies and governments in Africa provide training in solar energy professions (Togo and South Africa). Investments in climate-smart infrastructure can help cities create jobs. Decarbonization is an opportunity to foster manufacturing activity in the region, including the production of Internet of Things components, added value to minerals that will fuel the green economy and insertion into regional value chains.