World Bank in its recent report for October 2020, titled “Charting the road to recovery” has warned Nigeria and other Africans not to relax despite recording lower cases and mortality rates comparatively to other regions of the world.
READ: World Bank predicts rebound of Sub-Saharan Africa’s economy next year
The report cautioned African countries not to let their guard down, a part of the report read thus: “With the notable exception of South Africa, Sub-Saharan Africa appears to have so far escaped the worst of the health crisis. As of September 28, the numbers of COVID-19 confirmed cases and deaths in the region were, respectively, 3.4 and 2.5 percent of those registered worldwide. However, great uncertainty surrounds the scale and trajectory of the pandemic in the region. The occurrence of a second wave in Europe and the United States and concerns about a potential second wave in African countries are fueling further uncertainty about the persistence and spread of the virus.”
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Commenting on the impact of the pandemic on African economies, the report noted that the pandemic had endangered a decade of hard-earned economic progress as economic activity in the region is expected to contract by 3.3% in 2020. It opined that by the end of 2021, the region’s GDP per capita will likely regress to its level in 2007.
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Narrowing it down, the report warned that in West and Central Africa, the decline in growth will be mainly driven by oil exporters. Non-resources intensive countries, including Côte d’Ivoire, Ghana, and Senegal, will slow but not contract, helped by relatively more robust growth in the agricultural sector. Corroborating this fact is the recent contraction of Nigeria’s economy by -6.10%. A part of the report stated: “Excluding Nigeria, growth in West and Central Africa is projected to rise to 3.0 percent in 2021.”
READ: 150 million to fall into extreme poverty by 2021 – World Bank
Why this matters: The report warned that in Africa, COVID-19 could push up to 40 million people into extreme poverty, erasing at least five years of progress in fighting poverty. Similarly, COVID-19 could set back progress in building human capital, as school closures will affect nearly 253 million students, potentially causing losses in learning. Therefore, it is imperative for the right policy mix which comprises sound macroeconomic and fiscal policies to be adopted.
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Way forward: The report stated that the road to recovery will be long and steep, and opined that sustained recovery will depend on how fast African countries prioritize policy actions and investments that address the challenge of creating more, better and inclusive jobs. Some of the highlights of its policy recommendations include; Expanding digital infrastructure and making connectivity affordable, reliable, and universal.
Creating jobs in Sub-Saharan Africa will require a decisive shift from exporting raw materials to greater value addition and intra-Africa value chains.
Enhancing rural-urban and inland-coastal connectivity and investing in cities will raise agricultural productivity and re-allocate resources to more efficient job creating locations.
Full implementation of the African Free Continental Trade Agreement (AFCTA)
