Knowledge Note

"Economic growth in Sub-Saharan Africa is projected to decline from 2.4 percent in 2019 to -2.1 to -5.1 percent in 2020"

The COVID-19 pandemic has taken a toll on human life and brought major disruption to economic activity across the world. Despite a late arrival, the COVID-19 virus has spread rapidly across Sub-Saharan Africa in recent weeks. Economic growth in Sub-Saharan Africa is projected to decline from 2.4 percent in 2019 to -2.1 to -5.1 percent in 2020, the first recession in the region in 25 years. The coronavirus is hitting the region’s three largest economies —Nigeria, South Africa, and Angola— in a context of persistently weak growth and investment. In particular, countries that depend on oil and mining exports would be hit the hardest. The negative impact of the COVID-19 crisis on household welfare would be equally dramatic. African policymakers need to develop a two-pronged strategy of “saving lives and protecting livelihoods.” This strategy includes (short-term) relief measures and (medium-term) recovery measures aimed at strengthening health systems, providing income support to workers and liquidity support to viable businesses. However, financing of these policies will be challenging amid deteriorating fiscal positions and heightened public debt vulnerabilities. Therefore, African countries will require financial assistance from their development partners -including COVID-19 related multilateral assistance and a debt service standstill with official bilateral creditors.

This document is an Executive Summary of recent analysis on the potential impact of COVID-19 on African economies presented in the Spring 2020 edition of Africa's Pulse: An Analysis of Issues Shaping Africa’s Economic Future.

To read the entire report in English, please click here.

 

About the Presenters

Cesar Calderon

Lead Economist, World Bank

Calvin Zebaze Djiofack

Senior Economist, World Bank

Gerard Kambou

Senior Economist, World Bank

Vijdan Korman

Consultant, World Bank

Megumi Kubota

Consultant, World Bank

Catalina Cantu Canales

Consultant, World Bank