World Bank predicts African economy to grow by one percentage point in 2021

By Conrad Onyango – Bird Newsroom

Global financial institutions are revising their outlook for Africa’s economic growth upwards, signaling that the continent is recovering from the impact of Covid-19 and becoming more resilient, despite a slower deployment of vaccines.

The latest economic outlook from the IMF and the World Bank shows Africa set to emerge from 2020 recession triggered by the Covid-19 pandemic.

The World Bank, in its latest edition of “Africa’s Pulse,” predicts the economy will grow 3.3 percent in 2021 – a one-percentage point increase from its April forecast.

“This rebound is currently fueled by high commodity prices, a relaxation of strict measures in the event of a pandemic and a resumption of world trade, ”said the World Bank.

The IMF shares similar sentiments in its regional economic outlook for sub-Saharan Africa, which it says is expected to grow 3.7 percent in 2021 and at an even higher rate (3.8 percent) in 2022.

“The recovery is supported by favorable external conditions on trade and commodity prices. It has also benefited from better harvests and increased agricultural production in a number of countries, ”said Abebe Aemro Selassie, director of the IMF’s Africa Department.

A surge in the prices of metals like copper, lead, manganese and nickel, above pre-pandemic levels, as well as record prices for coffee, sugar and wheat in recent years, have helped small and less resource-rich economies recover from the pandemic faster than expected.

The World Bank considers that Côte d’Ivoire and Kenya are recovering strongly – 6.2% and 5% respectively – while other non-resource-rich countries are expected to register an average growth rate of 3, 6% this year.

IFM also acceleration of growth for countries that do not consume oil resources by 1.2 percentage points to 4.7%, suggesting higher growth projections for two of the region’s largest economies – South Africa (5.0%) and Nigeria (2.6%) , compared to the World Bank forecasts of 4.6% and 2.4%.

Some tourism-dependent countries like the Comoros (1.6) and The Gambia (4.9) also performed well, due to large remittances which IMF analysts say have supported private consumption. The global fund sees remittances increase 2.6% in 2021 after a better-than-expected result in 2020.

A higher growth rate across the continent shows higher prospects for local businesses which the World Bank attributes to the ability of some countries to exploit the opportunities of the crisis to foster structural and macroeconomic reforms.

“Several countries have launched difficult but necessary structural reforms, such as unifying exchange rates in Sudan, reforming fuel subsidies in Nigeria and opening up the telecommunications sector to the private sector in Ethiopia, ”said the Brenton Woods Institution.

To maintain the positive trajectory, institutions are calling for a faster and sustained deployment of vaccines which they believe would accelerate the region’s growth to 5.1% in 2022 and 5.4% in 2023.

According to the WHO, Africa is still facing a shortage of 275 million Covid-19 vaccines against an end-of-year goal of fully vaccinating 40% of its population. It says the continent has fully immunized 77 million people, or just 6% of its population.

Based on the latest data from the world health body, only three African countries – Seychelles, Mauritius and Morocco – have already reached the target set in May by the World Health Assembly, the highest body global health policy setting. Tunisia and Cape Verde are also expected to meet the target by the end of the year.

bird story agency.

Katy F. Molnar