World Bank warns on sub-Saharan Africa recession

The World Bank is projecting that sub-Saharan Africa will go into recession for the first time in a quarter a century as the Covid-19 pandemic disrupts economies.

The global financial institution says the region’s economy could contract by -2.1% to as much as -5.1% this year.

The outbreak has spread to 52 countries on the continent that have cumulatively reported 10,250 confirmed cases and 492 deaths.

The World Bank and the International Monetary Fund are calling for a ‘debt standstill’ from creditors to free up money to go into saving lives and protecting livelihoods.

Africa was among the last to be hit by Covid-19, and the response from most countries was swift and hard – border closures, lockdowns and the quarantine of travellers.

The immediate result was a major disruption to trade. The World Bank says reduced access to agricultural inputs, disruption of supply chains and loss of livelihoods could lead to a food shortage.

Africa’s biggest economies are worst hit – Nigeria and Angola by the collapse of oil prices, and South Africa by a drop in mining income.

Agricultural exports from Ethiopia and Kenya have all but shut down. And foreign financial inflows from tourism, remittances and direct investment have stopped.

Existing crises such as the desert locust invasion in Eastern and Central Africa, conflicts and drought in Southern Africa compound the problem.

The World Bank is proposing a freeze on debt payments, which would free up over $35bn (£28bn) used annually to service loans, as well as save $44bn in waivers on interest payments.

It is also urging the continent to consider cash transfers, food distribution, and fee waivers on basic services to support the poorest.

Source: BBC Africa