In Sub-Saharan Africa, the economic impact of the COVID-19 shock is severe.
However, countries in the region are weathering the storm so far. Economic activity in Sub-Saharan Africa is estimated to have contracted by 2.0 percent in 2020—the lower end of the forecast range of the April 2020 issue of Africa’s Pulse, and less than in some emerging markets and developing economies.
Available data from the last two quarters of 2020 point to a rebound in economic activity that explains why the contraction in the region was in the lower bound of the forecasts. It reflected a slower spread of the virus and lower COVID-19-related mortality in the region, strong agricultural growth, and a faster-than-expected recovery in commodity prices.
Nevertheless, COVID-19 has plunged the region into its first recession in over 25 years, with activity contracting by nearly 5.0 percent on a per capita basis. Vulnerable groups, such as the poor, informal sector workers, women, and youth, suffered disproportionately from reduced opportunities and unequal access to social safety nets.
Economic activity in the region is expected to strengthen as actions are deployed to contain new waves of the pandemic and vaccine rollouts gain speed. The 2021 baseline projection for the region is partly dragged down by the second wave of COVID-19 infections, driven by new and more transmissible variants, which appears to be worse than the first wave.
Africa’s economic recovery is expected to be multi-speed, with significant variation across countries
The COVID-19 pandemic has exacerbated public debt vulnerabilities, and significant assistance will be needed to address liquidity and solvency issues. The pandemic will continue to exert pressure on the region’s macroeconomic policy framework.
Faster progress on vaccine deployment along with credible policies to stimulate private investment would accelerate growth to 3.4 percent in 2021 and 4.5 percent in 2022 in Sub-Saharan Africa. As countries in Sub-Saharan Africa embark on the road to recovery from the COVID-19 pandemic, ensuring growth beyond 4 percent from 2022 and onward will be critical.
In their road to recovery, Sub-Saharan African countries will need ample financing for investments in human capital, energy, digital and physical infrastructure. The outbreak of the COVID-19 pandemic sharply affected economic activity, including employment, in Sub-Saharan Africa.
Policies that foster investments in innovation and digital technologies can help reset economic structures and facilitate catch-up with the rest of the world.
The Africa’s Pulse: An analysis of issues facing Africa’s economic future report is available online.