Will Covid-19 erase years of progress in sub-Saharan Africa?

The conclusion of the World Bank’s latest report “Africa’s Pulse: Charting the Course for Economic Recovery” published on October 8 is final for sub-Saharan Africa: “The pandemic has endangered” a decade of hard-won economic progress ” . Weighted down by the economic fallout from the Covid-19 pandemic, growth in sub-Saharan Africa is expected to drop to – 3.3% in 2020, dragging the region into its first economic recession in 25 years. The pandemic also risks pushing 40 million Africans into extreme poverty, erasing at least five years of progress in the fight against poverty. This analysis only confirms the forecasts of the World Bank group on a probable economic recession in Africa due to Covid-19.

With more than a million cases of coronavirus reported across the continent, the pandemic does not yet appear to be under control in sub-Saharan Africa. Some countries, such as Senegal or Mauritius, have been able to react in time to limit the spread of infections. However, the containment measures come with very high costs for the economy, as we have seen around the world.

But, then, how to revive proven economies on all sides? Where are the major continental economic powers and what about the actions taken to give respite to the poorest countries? The Africa’s Pulse report provides a semi-annual analysis of the economic prospects of the region’s economies, as close as possible to reality.

Read also Sub-Saharan Africa: a disappointing tomorrow?

African giants hit hard

Globally, Albert Zeufack, Chief Economist at the World Bank for Africa, explains that “the road to economic recovery promises to be long and difficult, but it can be accelerated, solid and more inclusive if African countries prioritize reforms and investments that will meet the challenge of creating more inclusive and better jobs ”.

Among the countries most affected are giants like Nigeria. In the second quarter alone, the country saw its real GDP decline 6.1% from a year ago, its lowest level in more than a decade. Over the same period, South Africa, under strict containment measures, saw its real GDP plunge by 17.1%. Angola, the second oil-producing country in sub-Saharan Africa after Nigeria, saw its economy shrink 1.8% in the first quarter of 2020, compared to last year.

The decline in growth has been particularly marked for metal-exporting countries, for which real GDP is expected to contract by 6%, partly reflecting the large drop in output in South Africa. While on the side of oil-exporting countries, after growing 1.5% in 2019, real GDP is expected to decline by more than 4 percentage points in 2020, due to the decline in growth in Angola and Nigeria.

Read also Covid-19: Sub-Saharan Africa will plunge into recession

Some countries are doing

In contrast, countries whose economies are not primarily dependent on natural resources are expected to post only a moderate decline in growth in 2020. If we expect a significant slowdown in these countries – such as Côte d ‘ Ivory, Ethiopia or Kenya – growth should remain positive, due to the greater diversification of their economies. However, tourism-dependent economies, in particular Cape Verde, Mauritius and the Seychelles, have experienced a sharp contraction in their economy, with the service sector heavily affected by the drastic drop in international tourism.

Read also Post-Covid-19: the aftermath of economic challenges for Africa

But recession is inevitable

Efforts to stem the spread of the virus have interrupted or reversed economic advances, triggering the region’s first recession in 25 years, and the end of the tunnel is still far away. Especially since the fear of a possible second wave of the epidemic creates many uncertainties as to the economic future of the region.

This year, the significant slowdown in economic activity is expected to cost the region at least $ 115 million in lost production. Gross domestic product per capita is expected to decline by 6%, or the level of 2007 – driven in particular by lower domestic consumption and investment, resulting from containment measures put in place to slow the spread. of the coronavirus. And this fall risks dragging nearly 40 million Africans into extreme poverty. That is to say, populations who have to live on less than $ 1.9 a day, or 1,000 CFA francs.

Read also West Africa: how companies are resisting the crisis

“A timid and uneven rebound”

“Although the pandemic has not said its last word and despite uncertainties related to the resistance and spread of the virus, African governments have started to put in place reforms and programs to support a post-economic recovery. -Covid-19 inclusive and sustainable, ”said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa. “The countries of the region are implementing policies and programs that create jobs and accelerate economic transformation in order to reduce the economic impact of the pandemic now, but also to develop the capacities necessary for a future inclusive economic growth. But the Africa’s Pulse report insists on a recovery supported by job creation, more investment in human capital and a digital transformation.

Several countries, including South Africa, Nigeria and Ethiopia, have already started implementing expected reforms in the energy and telecommunications sectors, spurred on by the current crisis. “In addition, 25% of African companies have accelerated their adoption of digital technologies and increased their investments in digital solutions, says the World Bank report”. On the social level, in mid-September, there were no less than 166 social protection measures deployed across 46 countries in sub-Saharan Africa, 84% of which concerned social assistance.

Read also “The Covid-19 confirms the urgency of diversifying the economy”

South Africa between recovery and scandal

And yet protests are taking place in various countries of the continent. In South Africa, this week, mobilizations took place in several cities to denounce the management considered disastrous by the government, which caused the loss of two million jobs in the wake of the Covid-19 pandemic.

These rallies, minimalist because of the epidemic, were organized at the call of the main trade union center, Cosatu, to also denounce the low wages and the many corruption scandals linked to the Covid, a “flagrant theft of funds intended to taxpayers ”. More than 2.2 million people lost their jobs between April and June, promising even more poverty and inequality in Africa’s most industrialized country.

In Pretoria, hundreds of employees, nurses, postmen and police officers expressed their fed-up: “In South Africa, there is a lot of corruption” and since the pandemic “it’s worse than worse”, Professor Titi Ragedi, 32, told Agence France Presse, who is waiting for a salary increase promised six months ago. Embezzled funds, contracts with politically friendly companies, overbilling and fraud: the giant has been faced in recent weeks with an embarrassing series of corruption scandals linked to the funds allocated to fight against the coronavirus.

The auditor general, the equivalent of a president of the Court of Auditors, denounced “frightening” levels of corruption, while investigators peel the accounts of more than 600 companies and organizations that have received more than 250 million dollars. euros to provide protective equipment to caregivers and distribute aid.

“As the pressure exerted by the pandemic on African economies continues to be felt, it is important for policymakers to create the infrastructure necessary for a rapid recovery of the economy. », Recalls Ousmane Diagana, vice-president of the World Bank for West and Central Africa. “Strong policies create the conditions for sustainable and inclusive recovery, as well as greater resilience to future shocks. “

To give some of the poorest countries in Africa some breathing space, the World Bank and the International Monetary Fund have proposed to suspend debt service for them this year. However, this will only settle a fraction of the total debt, which is why the Bretton Woods institution has issued a new appeal to private creditors. Finally, a note of hope, the report predicts a rebound in the regional economy from 2021.

Read also Kako Nubukpo: “Why do African debts always come back? “

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