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World Bank projects Africa’s growth at 3.4pc

GROWTH in the Sub-Saharan region is forecast to rise between 2.3 and 3.4 percent in 2021, supported by strong agricultural growth and a faster-than expected recovery in commodity prices.

Strong agricultural growth and a faster-than expected recovery in commodity prices has helped many African economies weather the economic storm induced by the Covid-19 pandemic. Prospects therefore for recovery in the Sub-Saharan Africa are strengthening amid actions to contain new waves of the pandemic and speed up vaccine rollouts. This is according to the World Bank’s biannual Economic Analysis for the region.

The World Bank in its latest Africa’s Pulse dubbed “The Future of Work in Africa: Emerging Trends in Digital Technology Adoption”, said growth was forecast to rise between 2.3 and 3.4 percent in 2021, depending on the policies adopted by countries and the international community.

Economic growth in Sub-Saharan Africa is estimated to have contracted by 2.0 percent in 2020, closer to the lower bound of the forecast in April 2020. The Pulse noted that a slower spread of the virus and lower Covid-19-related mortality, strong agricultural growth and a faster-than expected recovery in commodity prices has helped many African economies weather the economic storm induced by the Covid-19 pandemic.

It however indicated that Sub-Saharan Africa’s recovery was expected to vary across countries. The report noted that economic recovery hinged on countries deepening reforms that created jobs, encouraged investment, and enhanced competitiveness. It stressed that a second wave of Covid-19 infections was partly dragging down the 2021 growth projections, with daily infections about 40 percent higher than during the first wave. According to the report, while some countries had a significant drop in Covid-19 infections due to containment measures adopted by the government, other countries were facing an upward trend in infections.

The resurgence of the pandemic in late 2020 and limited additional fiscal support will pose an uphill battle for policy makers as they continue to work toward stronger growth and improved livelihoods for their people. Africa’s Pulse recommended those policies be complemented by reforms that fostered the country’s inclusive productivity growth and competitiveness. “Reducing countries’ debt burdens will release resources for public investment, in areas such as education, health, and infrastructure. Commenting on the report, World Bank Chief Economist for Africa, Albert Zeufack, observed that African countries had made tremendous investments over the last year to keep their economies afloat and protect the lives and livelihoods of their people. “Ambitious reforms that support job creation, strengthen equitable growth, protect the vulnerable and contribute to environmental sustainability will be key to bolstering those efforts going forward toward a stronger recovery across the African continent,” Mr Zeufact said.

The report also said real Gross Domestic Product growth for 2022 was estimated at 3.1 percent. For most countries in the region, activity will remain well below the pre-Covid-19 projections at the end of 2021, increasing the risk of long-lasting damage from the pandemic on people’s living standards.

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