The United Nations (UN) has disclosed that Africa’s economy will rebound by 5% in 2021 after declining by 4.1% in 2020 due to the effects of the pandemic.
This was disclosed by the UN Economic Commission for Africa (ECA) in a report on Tuesday. The report titled: “Innovative finance for private sector development in Africa,” cited that Africa will need US$44 billion for the testing, personal protective equipment for frontline medical staff, equipment and treatment of the coronavirus (COVID-19).
The UN discloses that Africa’s economic revival would need effective policies to combat the pandemic, also compounded by global actions to fight the pandemic.
The forecast that as Africa increases Health spending to sustain their health systems and absorb costs related to the COVID-19 lockdowns. The continent will need US$44 billion for the testing, treatment and hospitalization of Covid-19 patients
The pandemic will force between 5 to 29 million people into extreme poverty compared with a baseline 2020 African growth scenario, according to ECA projections.
The UN called for more investment in African infrastructure and innovation, citing poor innovation which affects Africa’s productions abilities and reduced education quality.
- UN said the estimated financing gap is US$2.5 trillion for all emerging and developing countries and US$200billion to US$1.3trillion for Africa, and urges the continent to invest in human capital to bridge the gap.
- UN said due to Africa’s population growth of 43% over 2015–2030, the gap could reach US$19.5 trillion by 2030.
- UN said Africa had the second-fastest growing economy in the world in 2019, however, the pandemic would affect growth between 1.8% and -4.1% in 2020.
The UN calls for more banking reforms to reduce the effects of monetary crisis, and also to boost private sector-led investment in the continent through stronger equity and debt capital.
What you should know about Africa’s economic situation
- Nairametrics reported earlier that IMF expects sub-Saharan Africa’s overall economy to fall by negative 3.2% in 2020 with a recovery in 2021 of 3.4%. While the Nigerian economy would witness a deeper contraction of 5.4% and not the 3.4% it projected in April 2020. But, the global lender expects Nigeria’s economy to rebound by 2.6% in 2021.
- The World Bank earlier said the outbreak of the coronavirus pandemic could make an additional 5 million Nigerians poor, given the imminent recession which is expected to be the worst since the 1980s.
- The President of the World Bank Group, David Malpass, revealed that the bank needs to spend at least $70 billion per year to tackle the impact of the pandemic induced poverty.