COVID-19: 40 million Nigerians, others in Sub-Saharan African countries face extreme poverty in 2020 – World Bank
... Nigeria records worst decline in GDP in more than a decade
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THE COVID -19 pandemic will drive up to 40 million people in Nigeria and other countries in Sub-Saharan Africa into extreme poverty 2020, the World Bank said in a latest report.
The World Bank also reported that Nigeria’s GDP contracted by 6.1 per cent in the second quarter of 2020 – the worst decline in more than a decade.
The report confirmed the economic downturn in Sub-Saharan Africa as a result of the impact of the COVID-19 global pandemic, noting that a substantial downturn in economic activity will cost the region at least $115 million in output losses this year.
The latest edition of Africa’s Pulse, the World Bank’s twice-yearly economic update for the region, titled ‘Charting the Road to Recovery’, was launched virtually on Thursday.
The report said growth in Sub-Saharan African countries, including Nigeria, is predicted to fall to -3.3 per cent in 2020, pushing the region into its first recession in 25 years.
“The pandemic could also drive up to 40 million people into extreme poverty in Africa in 2020, erasing at least five years of progress in fighting poverty,” the World Bank said, quoting parts of the report in a press statement issued to announce the release of the latest edition of Africa’s Pulse.
With over a million reported COVID-19 cases across the continent, the pandemic is still not under control in Sub-Saharan Africa, the World Bank noted, adding that although some governments have acted rapidly to reduce the spread of infections, successful containment measures come with a high economic cost, as is the case across the globe.
The pandemic has already taken a huge toll on Nigeria, according to the World Bank, with the country recording its worst decline in more than a decade.
“Nigeria’s real GDP contracted by 6.1 per cent year-on-year in the second quarter of 2020 – the worst result in more than a decade,” the report said.
South Africa and Angola, the other big economies in the region, are equally suffering from the impact of the pandemic.
“South Africa, operating under severe containment measures, saw its real GDP contracted by 17.1 per cent year-on-year in the second quarter of 2020. Angola, Sub-Saharan Africa’s second largest oil producer after Nigeria, saw its economy contract by 1.8 per cent year-on-year in the first quarter of 2020.”
The decline in growth has been stronger among metals exporters where real GDP is expected to contract by six per cent, partly reflecting the large drop in output in South Africa.
Among oil exporters, after expanding by 1.5 per cent in 2019, real GDP is projected to fall by more than four per cent in 2020, owing to contractions in Angola and Nigeria.
However, the report observed that on average, non-resource-intensive countries would record a moderate decline in growth in 2020, unlike the resource-intensive counterparts who are experiencing more severe contractions.
“In several non-resource-intensive countries, including Côte d’Ivoire, Ethiopia, and Kenya, growth is expected to slow substantially, but remain positive, owing to their more diversified economies.
“Meanwhile, the tourism-dependent economies, especially those of Cabo Verde, Mauritius, and Seychelles, experienced a sharp contraction as exceptionally weak international tourism severely impacted the service sector,” the World Bank added.
With the region losing at least $115 million in output losses in 2020 due to a substantial downturn in economic activity, GDP per capita growth is expected to contract by nearly 6.0 per cent, in part caused by lower domestic consumption and investment brought on by containment measures to slow the spread of the coronavirus.
The World Bank, in the latest edition of Africa’s Pulse, advised that economic recovery will require massive investments across countries, as well as financial support from the international community.
It recommended a bold reform agenda that includes policies that create fiscal space, along with policies to speed up job creation.
According to the report, several countries, including South Africa, Nigeria, and Ethiopia, have already begun implementing long-needed reforms in energy and telecommunications spurred by the current crisis, and 25 per cent of African firms have accelerated the use of digital technology and increased investments in digital solutions.
By mid-September, 46 countries in Sub-Saharan Africa had put in place 166 social protection measures – with social assistance representing 84 per cent of the measures.
Social protection programs have proven to be a critical tool to mitigate the social impact of the pandemic, the World Bank observed.
“The road to recovery may be long, and it may be steep, but prioritising policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and inclusive recovery for African countries,” Albert Zeufack, World Bank Chief Economist for the Africa regions, said during the virtual launch of the Africa’s Pulse report.
In the same vein, Ousmane Diagana, World Bank Vice President for Western and Central Africa, stressed the need for policymakers to create the infrastructure necessary for rapid recovery, as COVID-19 continues to put substantial pressure on the region’s economies.