The African Development Bank (AfDB), through its East Africa Regional Economic Outlook 2020, says that East Africa is still Africa’s fastest-growing region, despite the disruptions brought about by COVID-19.
Economic disruptions caused by the COVID-19 pandemic have pushed East Africa’s 2020 growth projection to 1.2%, rebounding to 3.7% in 2021.
However, the projection is under the baseline scenario that assumes the virus is contained by the third quarter of this year.
In the worst-case scenario, in which the pandemic persists until the end of 2020, growth is projected to slow down to 0.2%, still above Africa’s predicted average of -1.7% and the global average of -3.4%.
Prior to the COVID-19 pandemic, the region’s economic growth was projected at more than 5%, well above the continent’s average of 3.3% and the global average of 2.9%. However, COVID-19-induced shocks and the locust invasion have contributed to job losses, increased humanitarian needs, and aggravated poverty and income inequality.
EAC trade volumes have dropped by 40% due to the restrictions on the movement of people and goods. The volumes of EAC trade dropped significantly after February when coronavirus resulted in tight freight controls at key border points, allowing the passage of agricultural and food products only.
At the height of the pandemic, AfDB provided support including $212 million to Kenya, $165 million to Ethiopia, $4 million to South Sudan, and $10 million to Seychelles to help them mitigate the effects of the disruptions.
Overall, AfDB projects that Africa’s GDP will contract by 3.4% in 2020, dropping by 7.3% from the pre-COVID-19 growth projection. In addition, the bank says that cumulative GDP losses could range between $173.1 billion and $236.7 billion in 2020-2021.