The coronavirus outbreak would have a devastating impact in Sub-Saharan Africa and would lead to the region’s first recession in 25 years, according to World Bank’s report Africa Pulse released on Thursday.
The impact could provoke the worst kind of economic downfall in biggest in economies like South Africa and Nigeria.
“While most countries in the region have been affected to different degrees by the pandemic, real gross domestic product growth is projected to fall sharply, particularly in the region’s three largest economies, Nigeria, Angola, and South Africa, as a result of persistently weak growth and investment,” said the report.
Dawie Roodt, Chief Economist of Efficient Group, told Xinhua that the report doesn’t come as a surprise.
“I agree the region will contract but it’s important for governments to correct some of the structural issues that are a problem in the economies. South Africa would be the hardest hit. In the case of South Africa, the issue of fiscal account and problems within state-owned companies must be sorted out,” said Roodt.
The report recommended that governments must give support especially to citizens working in the informal sector, emphasizing the need to strengthen the health care system. It also suggested the distribution of food parcels and minimize the disruption to chain food supply.
“It’s important for government to ensure that people are supported. Even though it would be difficult to support the informal sector because of how it’s structured, it must be supported,” Roodt added.
The report also said the region’s economy will contract 2.1 percent to 5.1 percent from growth of 2.4 percent last year, and that COVID-19 will cost sub-Saharan Africa 37 to 79 billion U.S. dollars in output losses this year due to trade and value chain disruptions, among other factors.
“The COVID-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” Hafez Ghanem, World Bank Vice President for Africa said.