The African Development Bank (AFDB) published its African Economic Outlook 20202 Supplement on Tuesday and warned that the continent’s GDP would fall by at least 1.7%, and if the coronavirus pandemic continues into the second half of 2020, it could contract up to 3.4%.
“Real GDP in Africa is projected to contract by 1.7% in 2020, dropping by 5.6 percentage points from the January 2020 pre-COVID-19 projection of the virus, if the virus has a substantial impact but of short duration. If it continues beyond the first half of 2020, there would be a deeper GDP contraction in 20202 of 3.4% down by 7.3 percentage points from growth projected before the outbreak of COVID-19,” the bank said.
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AFDB warns that cumulative GDP losses could range between $173.1 billion and $236.7 billion in 2020-2021.
“Africa could suffer GDP losses in 20202 between $145.5 billion (baseline) and $189.7 billion (worst case) from the pre-COVID-19 estimated GDP of $2.59 trillion for 2020”.
The bank warned some losses will be carried over into 2021, as the projected recovery would be partial, and warns projected GDP losses for 2021 ranges from $27.6 billion to $47 billion (worst case).
The bank said countries with poor healthcare systems, oil-exporting nations, tourism-dependent nations and other resource-dependent nations will be the hardest hit.
The bank calls for countries to reopen economies and advised a “phased and incremental approach that carefully evaluates the trade-off between restarting economic activity to quickly and safeguarding the health of the population”.
The Economic Outlook Supplement is a revised projection from an earlier January outlook that projected 3.9% growth from Africa’s largest multilateral bank.