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Business News

Output of Sub-Saharan Africa dipped by 3.7% in 2020 due to COVID-19 – World Bank

Sub-Saharan Africa’s economies dipped by 3.7% in 2020 as a result of the COVID-19 pandemic and lockdown measures.

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Economy: IMF & World Bank differ on Nigeria’s growth outlook, Amid coronavirus spread, World Bank to step down global growth forecast , Nigeria to receive first tranche of World Bank’s $3 billion loan soon, World Bank commits $12 billion to curb coronavirus, defend developing countries’ economy

The output in Sub-Saharan Africa dipped by an estimated 3.7% as a result of the COVID-19 pandemic and associated lockdown measures, which obviously disrupted activities in most countries in the region.

This is according to the “Global Economic Prospect January 2021report published by the World Bank.

READ: World Bank: Lower oil demand may persist till 2021

According to the report…

  • The hardest hit countries were those with large domestic outbreaks, those heavily dependent on travel and tourism – which virtually slowed to a near-complete halt, as well as commodity exporters, particularly of oil.
  • Although a few countries have managed to slow some large outbreaks (Ethiopia, Kenya, South Africa), outbreaks persisted in the second half of 2020 in several countries with little sign of abating. Various mitigation measures have remained in place as a result, weighing further on activity.
  • In Nigeria and South Africa – the two largest economies in the region – output fell sharply last year. The economy of Nigeria is estimated to have shrunk 4.1% in 2020 – 0.9% more than previously projected, as the effects of the COVID-19 pandemic and associated measures were worse than expected and affected activities in all sector.
  • Growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7% in 2021 – 0.4% weaker than previously projected, before firming to 3.3% in 2022. While the rebound in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate in line with the rebound in economic activity among major trading partners.
  • Despite the envisioned recovery, the level of regional GDP in 2022 is forecast to remain below the level projected in January 2020. The sluggish recovery reflects persistent outbreaks in several economies that have inhibited the resumption of economic activity, particularly in services sectors such as tourism.

READ: Global Economy to grow by 4% in 2021 – World Bank

Specta

What you should know

  • The economy of South Africa was quite peculiar as it was already on a weak footing before the pandemic hit, with output falling by 7.8% in 2020.
  • It is to be noted that South Africa suffered the most severe COVID-19 outbreak in Sub-Saharan Africa, which prompted strict lockdown measures and brought the economy to a standstill.
  • Most Oil exporters grappled with sharply lower prices (i.e. Nigeria, Angola, Republic of Congo, Equatorial Guinea, South Sudan), while those with large travel and tourism sectors suffered from near-complete shutdowns of tourism-related activity (Cabo Verde, Ethiopia, Mauritius, Seychelles).
  • Contractions in agricultural commodity exporters were typically less steep, with some even avoiding outright recessions (Benin, Côte d’Ivoire, Malawi, Uganda).

READ: IMF cuts global economy growth forecast; hits at strain in emerging markets

Why this matters

As a result of the lingering adverse effects of the pandemic in the sub-region, there might be a weaker than anticipated recovery in Sub-Saharan Africa – traceable to delayed distribution of effective vaccines.

The new waves of infections in most countries in the sub-region are capable of slowing the required growth in non-regional trading partners, which would dampen the projected growth pickup in Sub-Saharan Africa through lower export demand – particularly for tourism – and reduced investments.

READ: Fiscal actions of $11.7 trillion expended for COVID-19 pandemic and associated lockdowns – IMF

It is being feared that wide-scale vaccine distribution in Sub-Saharan Africa is likely to face many hurdles, though there has been substantial progress in COVID-19 vaccine development. These include poor transport infrastructure and distribution systems, weak health system capacity to implement large scale vaccination programs and outdated or insufficient cold storage systems to preserve vaccines.

READ: Nigeria’s economy will grow by 2.4% on average in 2021-25 – CEBR

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Coronavirus

FG says N10 billion disbursed funds not only for Covid-19 vaccines

FG has clarified that the N10 billion it earlier disbursed was not only for the development of Covid-19 vaccines.

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Nigeria might fall into recession - Budget Office, FG not enjoying dividend of trillions spent on CBN, NPA, other MDAs - Akabueze

The Ministry of Finance, Budget and National Planning has said that the N10 billion it released for vaccine development is not only for the production of Covid-19 vaccines.

This was disclosed by the Director-General of the Budget Office, Mr. Ben Akabueze, representing the Finance Minister during a meeting with the National Assembly Joint Committee on Health on Monday, reported by NTA.

Following the announcement of the disbursement of the sum of N10 billion to the Ministry of Health for the development of Covid-19 vaccine, the Joint Committee scheduled a meeting with the Ministers of Finance and Health for clarifications on the funds.

“The joint committee is invited to note that N10 billion has been released, to the Federal Ministry of Health under the budgetary vote referenced in above,” Akabueze said.

Ibrahim Oloriegbe,  Chairman, Senate Committee on health, said the Committee wanted to know what the use of the funds was for and urged against the implementation of a lockdown.

Specta

“We got to see that what was released was in line with what was already there, for preparing the country for all other vaccines arrangements

“So our economy, we only need to live with covid, we cannot with due respect, contaminate Nigeria with a lockdown, it will badly affect our economy,” Oloriegbe said.

The committee also said the total aim is to see how Nigeria can develop its capacity towards the development of vaccines,

The Joint Committee, therefore, resolved that the Minister of Health who was absent at the meeting should appear before it on Tuesday for a breakdown on the proposed use of the funds.

What you should know: Nairametrics reported last week that the Federal Government, through the Ministry of Finance, announced the sum of N10billion for the production of vaccines in Nigeria, to fight the coronavirus.

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Economy & Politics

Investing in digital economy, infrasture crucial to mitigate impact of COVID-19 pandemic – World Bank

Investing in digital economy will be crucial to mitigate the impact of COVID-19 and foster a sustained recovery in Sub-Saharan Africa.

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The World Bank has asserted that investing in the digital economy and infrastructure will be crucial to mitigate the impact of the COVID-19 pandemic and foster a sustained recovery and foster a sustained recovery in Sub-Saharan Africa.

This is according to the World Bank In Africa report – #AFRICAN CAN.

The report noted that in a time of Covid-19, dominated by lockdowns and social distancing, investing in the digital economy and infrastructure will be crucial to mitigate the impact of the COVID-19 pandemic and foster a sustained recovery.

It argued that the adoption of digital technologies by governments, households and firms in Sub-Saharan Africa still lags behind that of other regions in the world.

The report, therefore, maintains that government intervenes to reduce the cost of devices and services, avoid disconnections for lack of payment, and increase bandwidth will be key, considering that the road to economic recovery is projected to be long and arduous.

Specta

What they are saying

The report states that:

“The road to recovery will be long and arduous and will require policies and investments that focus on connecting people to job opportunities, which can help end extreme poverty, particularly post-COVID-19.”

What you should know

Even though the World Bank did not suggest the form that the policies and investments would take in the report, the Bank, in a separate report — flagship report – Global Economic Prospects – as reported by Nairametrics on the 19th of January, 2021, has argued that productivity-enhancing structural reforms are required for quick economic recovery.

The Bank suggests these productivity-enhancing reforms encompass promoting education, effective public investment, sectoral reallocation, and improved governance. Investment in green infrastructure projects can provide further support to sustainable long-run growth while also contributing to climate change mitigation.

According to the report:

  • Sub-Saharan Africa is home to more than 1 billion people, half of whom will be under 25 years old by 2050.
  • It is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and wipe out poverty in the region, enabling Africans across the continent to live healthier and more prosperous lives.
  • With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people.
  • Knowledge is essential for governments to make better policies and institutions to make more effective decisions, thus, governments should pay attention to research and analysis.

According to World Bank’s Flagship report – Global Economic Prospects.

  • Investment is projected to shrink again this year in more than a quarter of economies – primarily in Sub-Saharan Africa (SSA), where investment gaps were already large prior to the pandemic.
  • Growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7% in 2021 – 0.4% point weaker than previously projected, before firming to 3.3% in 2022.

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Corporate Press Releases

Otunba Subomi Balogun officially hands over Otunba Tunwase National Paediatrics Centre to UI and UCH

Otunba Olasubomi Balogun has formally handed over his Otunba Tunwase National Paediatrics Centre to the University of Ibadan and the UCH.

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The Founder of FCMB Group and notable philanthropist, Otunba Olasubomi Balogun (CON), has formally handed over his Otunba Tunwase National Paediatrics Centre (OTNPC), located at Ijebu Ode, Ogun State, to the management of the University of Ibadan and the University College Hospital (UCH). The gesture is part of his conscious efforts towards ensuring that Nigerians, especially children, have access to world-class healthcare facilities and specialised treatment services. The cost of the hospital is estimated at over N5 billion.

The transfer of the hospital to UI and UCH was preceded by the signing of a Memorandum of Understanding (MoU), which clearly states how the Centre is to be managed by the parties, on October 1, 2020, in Lagos.

The formal hand over ceremony, which took place on January 19, 2021, in the premises of the hospital, was attended by the Group Chief Executive, FCMB Group and Board Chairman, Otunba Tunwase Foundation, Mr. Ladi Balogun; the Group Head, Corporate Affairs of FCMB, Mr. Diran Olojo; the Acting Vice-Chancellor of the University of Ibadan, Professor Adebola Ekanola, (who was unavoidably absent), was represented by the Provost of the College of Medicine, Professor Yinka Omigbodun; the Management of University College Hospital, led by its Chief Medical Director, Professor Abiodun Otegbayo; the Interim Transition Management Committee of OTNPC led by the Chairman, Dr. Adeyinka Hassan, as well as other eminent personalities.

In his address, the Group Chief Executive, FCMB Group, Mr. Ladi Balogun, who represented the Founder of FCMB Group, Otunba Olasubomi Balogun, gave an insight to what inspired the business mogul to take up the extraordinary philanthropic project almost 11 years ago.

He recalled that “the inspiration by Otunba Olasubomi Balogun to build this great establishment started when he took over the children’s hospital at the UCH Ibadan, where he was exposed to the true plight of sick children and the high demand for world-class facilities to cater for their needs in a sustainable manner. An interaction with the then Minister of Health, late Professor Olikoye Ransome-Kuti, further propelled Otunba Balogun to do more in terms of the provision of world-class medical facilities. The exposure and interaction later became the brainchild of this N5 billion establishment, credited as a prototype of the Ormond Street Children’s Hospital in London, United Kimgdom.”

Specta

Speaking on the Banking icon’s decision to hand over the control and management of the Centre to UI and UCH, Mr. Balogun disclosed that, “at the end of its construction, some institutions requested to manage the hospital, but Otunba Balogun strongly believes that the University of Ibadan and University College Hospital are in a better position to do that effectively and further raise its status, considering their respective pedigrees.”

He further explained that “following the signing of the MoU last year by all the concerned parties, the resolution is that while the University College Hospital has been mandated to provide clinical services, the University of Ibadan will engage in research and other academic works, while students from UI would also be involved as part of the training”.

Appreciating the gesture, the Chief Medical Director, UCH Ibadan, Professor Otegbayo, said that it is an indisputable fact that the health and welfare of society are critical to the development of any community.

According to him, “We at the UCH are grateful for this opportunity to contribute to the well-being of residents in Ijebu community, Ogun State and Nigeria at large. We promise that as soon as all the legal nuances are sorted out, we shall fully move in and continue with what UCH is known for; unequalled provision of health care services, research and training.”

Commenting further on Otunba Balogun’s continuous generosity, he stressed that, “the UCH is not just witnessing the generosity and benevolence of Otunba Balogun now. Many years ago, he endowed the Otunba Tunwase Children Emergency Ward in UCH and he has been funding the Ward since then. A lot of children have been saved there, while training and research in Paediatrics have been going on unhindered.”

In her remarks, the Provost, College of Medicine, Professor Omigbodun, expressed delight at the official hand over of the hospital to both the university and UCH. She lauded Otunba Balogun for handing over the management of the hospital to the institutions.

According to her, “We are extremely grateful to Otunba Subomi Balogun for this generous contribution to the medical sector. This Centre would certainly contribute immensely to the training and research activities carried out by our academics. It is our hope that other Nigerians who have achieved greatness in their various fields would emulate him.”

Otunba Subomi Balogun is a well-known statesman, entrepreneur and philanthropist with several charitable projects and programmes for the people of his hometown of Ijebu-Ode, as well as many other parts of Nigeria. His philanthropy ranges from the provision of this world-class medical facility to education, capacity building, youth empowerment and other socio-economic initiatives, aimed at enhancing the development of humanity and society in general.

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