Sub-Saharan Africa is set to emerge from the 2020 recession brought about by the COVID-19 pandemic with growth expected to expand by 3.3 percent in 2021, one percent higher than the April 2021 forecast according to the latest edition of World Bank’s Africa Pulse.
This rebound is currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade, but remains vulnerable given the low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery.
According to the World Bank, growth for 2022 and 2023 will also remain just below 4 percent, continuing to lag the recovery in advanced economies and emerging markets, and reflecting subdued investment in SSA.
“Fair and broad access to effective and safe COVID 19 vaccines is key to saving lives and strengthening Africa’s economic recovery. Faster vaccine deployment would accelerate the region’s growth to 5.1 percent in 2022 and 5.4 percent in 2023, as more containment measures are lifted, boosting consumption and investment,” said Albert Zeufack, Chief Economist for Africa at the World Bank.
Excluding South Africa and Nigeria, the rest of Sub-Saharan Africa is rebounding faster.
The analysis shows that current speeds of economic recovery in the region are varied, with the three largest economies, Angola, Nigeria, and South Africa, expected to grow by 0.4 percent, 2.4 percent, 4.6 percent respectively. Excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 percent in 2021, with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 percent, respectively.
A positive trend, according to the report authors, is that African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms. Several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia.
Additionally, thanks to prudent monetary and fiscal policies, the region’s fiscal deficit, at 5.4 percent of GDP in 2021, is expected to narrow to 4.5 percent of GDP in 2022 and 3 percent of GDP in 2023.
READ; World Bank Projects Kenya’s Economy to Grow 5% in 2021
