The Sub-Sahara economy growth forecast is projected to resume to 2.8% this year and firm to 3.3% in 2022, underpinned by stronger external demand, mainly from China and the United States, higher commodity prices, and containment of COVID-19.
In the global economic Forecast, the world bank said, output in Sub-Saharan Africa shrank an estimated 2.4% in 2020. The decline resulted from the COVID-19 Pandemic, which resulted in a wider budget deficit and a spike in government debt, heightening the risk of debt distress in some countries.
However, the world bank has expressed optimism in the region this year, saying growth has gradually resumed reflecting positive spillovers from strengthening global economic activity, including higher oil and metal prices and some progress in containing COVID-19, especially in Western and Central Africa.
Some countries have potentially recovered, with the three largest economies in Africa, South Africa, Nigeria and Angola recording growths in most industries to pre-pandemic levels.
However, procurement and logistical challenges are expected to continue to hobble the pace of vaccination despite the provision of vaccines by COVAX. Policy uncertainty and the lingering effects of the pandemic are expected to delay major investments in infrastructure and extractives and weigh on the recovery.
Per capita income levels in 2022 are expected to be 4% lower on average than in 2019. Conditions in the region’s fragile and conflict-affected countries are expected to be particularly challenging; their average output level in 2022 is forecast to be 5.3% below its size in 2019.
Growth in Nigeria is expected to resume at 1.8% in 2021 and edge up to 2.1% next year, assuming higher oil prices, structural oil sector reforms, and market-based flexible exchange rate management. South Africa is forecast to grow 3.5% this year and 2.1% in 2022. Fiscal pressures and weak public investment growth dim South Africa’s near-term growth prospects, and structural impediments to potential growth remain. Angola is projected to expand 0.5% in 2021 and 3.3% in 2022, on the back of stronger oil prices and government consumption.
Elsewhere in the region, growth in industrial commodity exporters excluding Angola, Nigeria and South Africa is expected to increase to 2.4 % in 2021-22. In agricultural commodity exporters, growth is forecast to resume at a faster pace of 4.5% a year on average in 2021-22.