Spike in new virus cases risks Africa GDP growth
Monday March 15 2021
Africa’s economic recovery could be jeopardised by a resurgence of Covid-19 infections in 2021 according to the latest Economic Update released by the African Development Bank on Friday.
In its latest forecast, AfDB projects real GDP in Africa to grow by 3.4 percent in 2021, after contracting by 2.1 percent in 2020. Recovery will be underpinned by a resumption of tourism, a rebound in commodity prices and a rollback of pandemic-induced restrictions.
However, uncertainty surrounding this positive growth outlook for Africa is high. This week, the continent is expected to surpass four million Covid-19 infections since the first confirmed case in February 2020, according to estimates by the World Health Organisation. Over 106,000 lives have been lost so far.
The continent's prospects largely depend on its access and ability to effectively deploy therapeutics and vaccines in the coming months.
"We are looking at growing back with greater economic resilience and making sure that growth is inclusive of young people and women," said AfDB president Akinwumi Adesina. However, he underscored the need for the continent to secure more vaccine doses for at least 60 percent of its population — needed to achieve herd immunity.
"The issue of vaccine justice is important ...we must develop our pharmaceutical capacity..." he said, adding that the bank will be helping the continent to upgrade its pharmaceutical capacity.
Failure to access and deploy vaccines, Dr Adesina argued, would complicate economic recovery on the continent as countries would face barriers and restrictions on travel.
The report also shows that the pandemic has caused a surge in government financing needs in Africa. AfDB estimates that African governments needed additional gross financing of about $154 billion in 2020 to respond to the crisis.
The average debt-to-GDP ratio in Africa is expected to climb significantly in the short to medium term. Although the average debt- to-GDP ratio, a standard measure of debt sustainability, had stabilised around 60 percent of GDP between 2017 and 2019, it is projected to increase by 10 to 15 percentage points by 2021.
"We need international frameworks for managing deb," said Joseph Stiglitz, a professor at Columbia University.