Africa is expected to partially rebound next year from a pandemic-induced economic slump, but it could still lose nearly a quarter of a trillion dollars in economic output in 2020 and 2021, the African Development Bank (AfDB) said on Tuesday.
Africa has so far largely been spared the rampant infections and heavy death tolls seen in Europe and the United States. Its hardest-hit nation, South Africa, has recorded around 200,000 cases of COVID-19 and just over 3,100 deaths.
African economies, however, have not been immune to the pandemic’s global shockwaves, with oil exporters such as Algeria, Angola, Libya and Nigeria on track to witness the continent’s sharpest declines in economic output.
Under a scenario in which the pandemic continues into the second half of this year, the AfDB forecasts a 3.4% contraction in gross domestic product in 2020 – compared with a pre-pandemic projection by the Abidjan-based bank of growth of 3.9%.
The figures were included in a revision of the AfDB’s African Economic Outlook, which was originally published before the pandemic.
A partial V-shaped recovery should see growth rebound to between 2.4 and 3% next year, the bank said.
“But the projected recovery in 2021 would not make up for an estimated cumulative loss to Africa’s GDP of $173.1–$236.7 billion for 2020 and 2021 due to the pandemic,” the report said.
A rebound is threatened by risks including a potentially worsening pandemic, subdued commodity prices, volatile global financial conditions and even natural disasters such as the locust infestations that have ravaged East Africa this year.
International Monetary Fund slashed its 2020 global output forecast last month, projecting the world’s economies will shrink 4.9%, compared to a 3.0% contraction predicted in April.
The European Commission forecast on Tuesday that the euro zone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought.