The coronavirus pandemic could plunge sub-Saharan Africa into recession in 2020 for the first time in 25 years, the World Bank said in a new forecast on Thursday.
Africa has at least 10,956 confirmed cases of Covid-19, with 562 reported deaths and 1,149 recoveries it has been reported.
It is projected that 450 000 Africans could test positive for the coronavirus by early May. If accurate, this pandemic would be catastrophic for the continent. It could also overwhelm African countries’ health systems, devastate their economies and threaten millions of people with unemployment, hunger and homelessness.
The bank’s Africa’s Pulse report said the region’s economy is likely to accumulate 2.1% to 5.1% from growth of 2.4% last year, and that coronavirus will cost sub-Saharan Africa $37 billion to $79 billion in output losses due to trade and value chain disruption, among other factors this year.
World Bank Vice President for Africa Hafez Ghanem said. “The Covid-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard.”
Coronavirus, which has affected tourism and led to the suspension of international travel across the globe is gravely affecting economies, particularly in Africa.
The World Bank and International Monetary Fund are scrambling to provide emergency funds to African countries and others to fight the virus and mitigate the impact of sweeping measures that have been put in place to stop the spread of the virus.
While most countries in the region have been affected in different ways, real gross domestic product growth is projected to fall in the region’s three largest economies – Nigeria, Angola, and South Africa, the World Bank said.
Oil exporting-countries will be hard-hit; while growth is likely to weaken in the West African Economic and Monetary Union, and the East African Community due to weak external demand, disruptions to supply chains and domestic production.
The bank said that the epidemic has the potential to spark a food security crisis in Africa, with agricultural production potentially getting between 2.6% in an optimistic scenario and up to 7% if there are trade blockages.
Food imports may decline significantly (as much as 25% or as little as 13%) due to a combination of higher transaction costs and reduced domestic demand.
The World Bank said African governments should focus on saving lives and protecting livelihoods by spending money to strengthen health systems and taking quick actions to minimise disruptions in food supply chains.
Meanwhile the financial institutions have called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they can use the money to prevent the spread of the disease.
Cesar Calderon, the bank’s lead economist and lead author of the report, said that the immediate measures are important but there is no doubt there will be need for some sort of debt relief from bilateral creditors to secure the resources urgently needed to fight Covid-19 and that will help manage or maintain macroeconomic stability in the region.
The World Bank Group said that it is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs. It is deploying up to $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and regenerate African economies.