The COVID-19 economic devastation is the worst recession since the great depression and is hitting Sub-Saharan Africa’s economy very badly with a projected contraction of -3.4 percent in 2020 and a recovery of 3.4 percent in 2021, the International Monetary Fund (IMF) said on Wednesday while releasing its World Economic Outlook Update for 2020.
“Sub-saharan Africa is also being hit very badly in this crisis,” said Gita Gopinath, Economic Counsellor and Director of the Research Department at the IMF.
“In the case of Sub-Saharan Africa, we also have significant downgrade, and especially for the larger economies – South Africa, Nigeria,” Gita Gopinath said, adding that overall, Africa’s economic growth in 2020 will be negative, (-3.2 percent), with a projected recovery in 2021 of (3.4 percent).
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“This is a significant downward revision, and we have some very large negative growth forecast, for instance for South Africa it’s minus 8 percent, for Nigeria, it’s minus 5.4 percent growth,” she said.
“These economies are being hit very hard,” she added.
Gopinath said beyond the reduction in growth rate, for many countries, the distress caused by the current crisis would be very significant. “These are very difficult times.
Globally, she said, growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.
“In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s,” the WEO said.