Sub-Saharan Africa is set to emerge from the 2020 recession brought about by the COVID-19 pandemic with growth expected to expand by 3.3 per cent in 2021, one per cent higher than the April 2021 forecast according to the latest edition of World Bank’s Africa Pulse.
This growth in the Sub-Sahara economy is attributed to elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade, but remains vulnerable given the low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery.
According to the World Bank, growth for 2022 and 2023 will also remain just below 4 per cent, continuing to lag the recovery in advanced economies and emerging markets, and reflecting subdued investment in Sub-Sahara Africa.
“Fair and broad access to effective and safe COVID 19 vaccines is key to saving lives and strengthening Africa’s economic recovery. Faster vaccine deployment would accelerate the region’s growth to 5.1 percent in 2022 and 5.4 percent in 2023, as more containment measures are lifted, boosting consumption and investment,” Albert Zeufack, Chief Economist for Africa at the World Bank.
According to the report, African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms. Several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia.
However, the analysis shows that current speeds of economic recovery in Sub-Sahara are varied, with the three largest economies, Angola, Nigeria, and South Africa, expected to grow by 0.4 per cent, 2.4 per cent, 4.6 per cent respectively. Excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 per cent in 2021, with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 per cent, respectively.
Additionally, Sub-sahara’s fiscal deficit, at 5.4 per cent of GDP in 2021, is expected to narrow to 4.5 per cent of GDP in 2022 and 3 per cent of GDP in 2023. The growth is attributed to the prudent monetary and fiscal policies put in place in the region.