analysis. Covid-19 requires that 2020 is indeed a year of recession. According to data from the World Bank, by 2021, the situation in African countries will be different.
largeHis Covid has plunged Africa into the first year of a 25-year recession. It would have been worse. The latest semi-annual “African Pulse” report released by the World Bank Africa Office in April stated that “Economic activity in Sub-Saharan Africa will shrink by 2% in 2020, which corresponds to a lower level in Africa. In the April 2020 edition. The published forecast range”. The level of violence in the economic recession is much lower than in many developed countries. The World Bank pointed out: “These data reflect the slower spread of the virus in the region, the lower mortality rate from the Covid-19 virus, strong agricultural growth, and faster-than-expected recovery in commodity prices.”
Despite these not-so-bad results, poverty is still increasing. The most vulnerable people are particularly affected. They face insufficient opportunities and cannot have equal access to the social safety net.
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By 2021, sub-Saharan Africa is expected to achieve growth of 2.3% to 3.4%. However, the author of the report warned: “As the second wave of Covid-19 infections may be more severe than the first wave, the region’s baseline forecast for 2021 has been partially revised down due to the emergence of new, more spreadable virus variants. Since December 2020, the number of infections has increased by 40% compared to the first wave, forcing some governments to re-impose stricter lockdown measures like South Africa.
Albert G. Zeufack, chief economist for Africa at the World Bank, said: “Last year, African countries made a lot of investment to maintain the sustainable development of their economies and maintain the lives and livelihoods of their populations. These efforts will pave the way for a more solid recovery across the African continent. They must implement ambitious reforms to support job creation, encourage equitable growth, protect disadvantaged groups and protect the environment.”
African economy: what is the outlook for 2021?
Not all countries in the region can benefit from the same recovery momentum. Côte d’Ivoire and Kenya, which are poor in mineral resources, and Botswana and Guinea, whose economies are highly dependent on mining, are expected to see a strong rebound in 2021, thanks to the recovery of consumption and private investment and increased exports driven by the restoration of confidence. On the other hand, some heavyweights in the African economy will find it difficult to restart: Angola only 0.9%, Nigeria 1.4%. We could have expected that rising oil prices would be better. South Africa is expected to achieve 3% growth. Under the influence of the crisis, unemployment and underemployment in these three countries have surged. Although the inflation rate remains moderate, due to currency depreciation and rising food prices, the inflation rate is accelerating in some countries such as Nigeria and Angola. It is expected that oil-importing countries will also face greater inflationary pressures related to rising oil prices.
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In response to the health and economic crisis, countries have assumed debt. The protracted crisis raised the issue of investment financing and debt servicing burdens. The World Bank pointed out: “Solving liquidity and solvency issues will require a lot of help.” In this case, the funding gap will still be a challenge to overcome, and the expansion of the Debt Settlement Suspension Program (DSSI) will be a challenge for the institution Obvious. The World Bank is launching a campaign to reduce the debt burden, which will make it possible to free up public resources, especially for investments in education, health and infrastructure.
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The report states: “The facts have proved that the digital economy is essential to ensure the continued development of government, corporate, and social activities in the region when isolation and containment measures are in place.” Therefore, “African Pulse” focuses on the adoption and employment of digital technologies. The relationship between. Over the past few years, Nigeria and Kenya have consolidated their positions as financial technology centers (fintech).