The World Bank said due to the severe impact of the Covid-19 in the subsaharan region, economic activity is expected to contract by 2.8 percent in 2020.
The bank believe that the contraption would cause many to fall into extreme poverty, in a subregion that accounted for a share of the global poverty already occassioned by regional insecurity, weak economy, and poor healthcare system.
In the June Economic Outlook report of the bank, obtained by IMPACT NEWS, the economy of Nigeria is expected to shrink by 3.2 percent in 2020.
According to World Bank, 2020 economic activity in Nigeria stands to be the most severe in four decades due to over dependent on crude oil revenue.
“Amid the unprecedented collapse in oil prices, this year’s contraction in activity is set to be the most severe in four decades.
“The economy depends heavily on oil revenues, which represent over 80 percent of exports, about one-third of banking-sector credit, and one-half of general government revenues. Faced with a twin shock, the country’s slump in activity has been compounded by measures to slow the domestic spread of the virus—including closing of national and state borders, schools, and the temporary shutdown of markets. The oil sector is projected to contract by 10.6 percent, while non-oil output falls by 2.1 percent.”
The bank’s report forecast that economic activity recovery in Nigeria would be moderate.
For South Africa, the second largest economy in Africa, the world body expects economic activity to contract by 7.1 percent this year, which is the deepest in a century.
Growth is expected to rebound in 2021, helped in part by the government’s announced 10 percent-of-GDP fiscal stimulus package to soften the impact of the pandemic and help set the stage for a robust recovery.
The recovery according to World Bank could gain further traction if planned structural reforms are implemented, including plans to improve public investment management and to encourage greater private-sector participation in infrastructure development.
“However, prospects for faster growth over the medium term are likely to be constrained by needed fiscal tightening and will continue to be dampened by persistent power-supply disruptions and the need for extensive maintenance and repair work on the national grid.”
In other parts of the region, economic growth is also bleak due to restriction in international travel that would have heavy impact on tourism in countries like Cabo Verde, Mauritius, Seychelles and others.
Also due to domestic disruption occasioned by the pandemic, activity in industrial commodity exporters is also expected to contract in the year in countries like Angola, Democratic Republic of Congo, Gabon, Ghana, Namibia, Republic of Congo and Sudan.
