World Bank, Covid-19 will erase five years of progress in Africa

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World Bank, Covid-19 will erase five years of progress in Africa

If the crisis is hitting the east and south of the continent hard, Senegal, Côte d'Ivoire and Ghana are doing better thanks to their agriculture, underlines the latest edition of the Africa Pulse report.

It is a half-hearted “Pulse'Africa” report published on October 8 by the Office of the Chief Economist for Africa of the World Bank under the title “Charting a Path to Recovery”.

Admittedly, apart from South Africa which concentrates 60% of the cases of Covid-19 identified in sub-Saharan Africa, this one escaped the worst and the 24 deaths recorded in the region on September 026 represent only 3 % of deaths from coronavirus worldwide.

Admittedly, the recovery will be perceptible there from the third quarter of this year and the authors of the report risk sketching out a relatively optimistic scenario of + 2,1% growth in 2021 and + 3,2% in 2022, which rules out the hypothesis of a return of the virus and assumes a good performance of commodity prices.

Historic recession

Still, the combination of containment and the global recession weighs heavily on the economy of sub-Saharan Africa, which will experience a historic recession this year, with a drop in gross domestic product (GDP) of -3,3% on average.

According to the authors, this decline will "probably reduce its gross regional product per capita to its 2007 level, by the end of 2021" and the virus "could push 43 million people back into extreme poverty, canceling out five years of progress ”.

The countries most affected are also the most important, such as Nigeria, which saw its GDP collapse by 6,1% in the second quarter, and especially South Africa, which recorded as low as -17,1 % loss of GDP. Overall, Central and West Africa suffered less than East and Southern Africa.

Kenya, Ethiopia and island states have thus suffered more from the confinement and interruption of tourism than Senegal, Côte d'Ivoire or Ghana, partly protected by their agriculture.

A "modest and uneven" restart

"The road to recovery will be long and arduous", recognizes the report, especially as the restart which is announced will be modest and will not affect all countries equally. Indeed, "household spending on services will be constrained, industrial production will be slowed down and international trade will remain weak".

In addition, the weaknesses of the region remain. The decline of its incomes is inevitable with unstable prices of raw materials, tourism at half mast, smaller remittances and foreign investment halted.

This will cause a surge in budget deficits (on average 3,5% of GDP) and, by rebound, a further worsening of the debt of countries when they need it most to face the economic damage caused by the crisis. pandemic.

"They need to rebuild fiscal space, improve debt management and fight corruption," recalls the report. But he does not content himself with recalling the need to reform governance and institutions to achieve this. It emphasizes two assets that could allow sub-Saharan Africa to increase its productivity, increase the added value of its products and create the formal jobs it so badly needs: digital transformation and intra-trade. -African.

Call for international aid to consolidate the recovery

The pandemic has proven that "digital is not a luxury", we read. Forced into physical distancing and teleworking, public and private actors in Kenya, Mozambique, Togo, Zambia, Namibia, South Africa or Ethiopia have improved in one way or another. another, digital techniques and applications. The fields of agriculture, education and health could, tomorrow, benefit from these advances to improve their performance.

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As for regional trade, the World Bank wants to see it as a real protection against future crises from elsewhere. She pleads for the effective and rapid realization of the African Continental Free Trade Area (Zleca), because she noted that the facilities of the East African common markets have enabled them to cushion the collapse of 18,5% of trade. worldwide in the second quarter. Lowering customs barriers has helped Kenya to develop its trade to the point where they have just surpassed their pre-crisis level.

The report logically ends with a call for international help. Sub-Saharan Africa and in particular its low-income countries do not have the means for a vigorous recovery without which the recovery will be “not very robust” and will create few jobs.

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It is not the Debt Service Suspension Initiative (ISSD) that will release the necessary funds: the private sector reluctant to join this effort, Africa can only count on a relief of 2 billion this year. of its burden on multilateral institutions and developed countries. These must bring him massive amounts of fresh and cheap money.

This article appeared first on: https://www.jeuneafrique.com/mag/

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