Harare – The United Nations Economic Commission for Africa (UNECA) has expressed optimism that the continent’s economy will vastly improve this year after suffering major setbacks due to COVID-19.
The forecast was made by UNECA head of macroeconomics Mr Hopestone Chavula at the ongoing 53rd Session of the Commission and 2021 Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa, Ethiopia.
The conference is themed “Africa’s Sustainable Industrialisation and Diversification in the Digital Era in the Context of COVID-19”.
He said Africa’s GDP was estimated to have contracted in 2020 despite a recovery in the second half of the year, and the outlook for 2021 was positive.
“Fiscal deficits have widened due to increased government expenditure to halt the spread of COVID-19, with many more African countries at risk of debt distress. Accommodative monetary policies have been maintained to cushion the negative effects of the pandemic on economic activity despite inflationary pressure in some countries. African trade has declined during the Covid-19 pandemic, however, the implementation of the AfCFTA is expected to boost intra-African trade,” Mr Chavula said.
“Gains made over the past decade and progress achieved in areas of education, health and poverty eradication have been halted or reversed due to the pandemic. Access to concessional financing will be vital in restoring lives and livelihoods and regaining momentum towards achieving the SDGs and Agenda 2063.”
Mr Chavula said Southern and West Africa had the worst debt situations on the continent
“In Southern and West Africa, debt is estimated to have been relatively high in 2020 – mainly driven by COVID-19 rescue packages and lower global demand in countries such as South Africa, Angola and Zambia,” he said.