Economic growth in Sub-Saharan Africa is forecast to be negative at -5.1 percent for 2020 compared to the 2.4 percent of 2019, according to analysis by the World Bank.
The World Bank said in its bi-annual report, Africa’s pulse, that the effects of the coronavirus pandemic have pushed the region into its first recession in a quarter of a decade.
The report estimates the pandemic could cost the region between $37 billion and $79 billion in terms of output losses for 2020.
According to the Chief Economist for Africa at the World Bank Albert Zeufack, with the region experiencing worsening economic situations and rising public debt, governments do not have enough space to maneuver in deploying fiscal policy to address the coronavirus crisis.
“Africa alone will not be able to contain the disease and its impacts on its own; there is urgent need for temporary official bilateral debt relief to help combat the pandemic while preserving macroeconomic stability in the region,” Zeufack said.
The World Bank said that the region may require an emergency economic stimulus of $100 billion and a waiver for interest payments this year worth about $44 billion. Additionally, the analysis said that an authorization to postpone debt repayment would immediately inject liquidity and increase the fiscal space of African governments.
The Bank also cautioned that the COVID-19 pandemic may create a food security crisis due to a decline in agricultural production and food imports due to trade blockages, higher transaction costs and reduced domestic demand.
The Bank also encouraged the regions governments to invest in their health systems to strengthen the existing personnel and frameworks and better serve their citizens during this period.
The report also called for governments to implement social protection programs to support workers, especially those in the informal sector and formulate an exit strategy from COVID-19.
“Once the containment and mitigating measures are lifted, economic policies should be geared towards building future resilience. Economies still need to design policy pathways to achieve sustainable growth, economic diversification and inclusion,” the report said.