Africa loses US$115 billion to COVID-19

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Windhoek – Sub-Saharan Africa is pinning its hopes of economic recovery on stability in tourism, commodities and metals, as the World Bank this week said economies in the region will shrink by more than three percent because of the COVID-19 pandemic.

The World Bank said the projected 3,3 percent economic decline in 2020 had pushed the region into its first recession in 25 years, translating into US$115 billion in lost output this year. 

World Bank Vice-President for Eastern and Southern Africa Hafez Ghanem said “Although the pandemic is not over and the persistence and spread of the virus is uncertain, African governments have started putting in place policies and programs to support an inclusive and sustainable post-pandemic recovery.”

He added: “Countries are putting in place policies and programs that help create jobs and accelerate economic transformation to reduce the economic impact of the pandemic now, and build the capabilities needed.”

Africa recently breached the one million COVID-19 infection mark, and though most countries have eased lockdown measures, authorities say the pandemic is far from over.

“The road to recovery may be long, and it may be steep, but prioritising policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and inclusive recovery for African countries,” said Albert Zeufack, World Bank chief economist for Africa said this week.

The World Bank said Africa would have to bank on recovery of metals, a sector in which output is expected to drop by six percent in 2020; while oil would slump by more than four percent mainly because of depressed production in Angola and Nigeria.

For non-resource-intensive economies, the decline in growth in 2020 is expected to be moderate.

Bank of Namibia Deputy Director (Macro Models and Financing Stability) Postrick Mushendami said the country expected an economic rebound in mining in 2021.

“Although the economic challenges have been severe in the past few months we definitely expect the mining industry to pick up while metal prices could also contribute significantly to sustain growth in future,” he said.

He said tourism could also boost recovery across the SADC region.

Namibian economist Mally Likukela said the cost of COVID-19 was steep, saying proactive stimulation of productive sectors would ease economies back into growth positions.

“There have been stimulus packages but it will take some time for economies to start recovering from the challenges of COVID-19. Hope is primarily on commodities and metal prices, but the challenge is that investor appetite is at an all-time low,” he said.

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