Bank projects Africa’s growth to rebound to 3pc next year

Thursday, July 9th, 2020 00:00 |
A banking hall. Photo/PD/FILE

Henry Wahinya and Milliam Murigi

Africa’s economic growth could rebound next year, provided that governments manage Covid-19 infection rate well, according to updated forecasts from the African Development Bank (AfDB).

In a comprehensive socio-economic assessment of the pandemic’s impact, the bank said growth was now projected to rebound to 3 per cent  in 2021 from -3.4 per cent in the worst-case scenario for 2020.

The predictions are contained in a supplement to the Bank’s African Economic Outlook, which was released on January 30. At the time, Africa’s growth was forecast at 3.9 perc ent  in 2020 and 4.1 per cent  in 2021.

However, the supplement cautions that the growth outlook for 2021 and beyond would depend largely on African governments’ effectiveness in flattening the curve of the outbreak and policies to reopen economies.

Charles Lufumpa, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management, at the African Development Bank, said: “To reopen economies, policy-makers needed to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population. “

“Economic activities can be restarted incrementally on the basis of the transmission risks of different sectors,” Lufumpa said.

Executive Director of the African Economic Research Consortium and Former Governor of the Central Bank of Kenya, Njuguna Ndung’u described the African Economic Outlook 2020 supplement as “a very important and useful policy tool for African countries who actually need it  at this time.”

 “It will be useful now and in the future. It gives us important short, medium- and long-term strategies,” he added.

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