World Bank revises GDP growth for Sub-Saharan Africa

 World Bank revises GDP growth for Sub-Saharan Africa

World Bank revises GDP growth for Sub-Saharan Africa.

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The World Bank has  revised up  0,2%  real  GDP  growth for sub Saharan Africa  with expectations for  an estimated  2,3%  in 2021 and  3,1%  in  2022 as higher commodity  prices expected to rise due to an uptick in global demand  for commodities.

This is coming  as the region’s growth prospects  gradually improve  with some variation across countries.

“After an estimated 2.0 percent contraction in 2020, real GDP in Sub-Saharan Africa is projected to rebound to growth of 2.3 percent in 2021 and 3.1 percent in 2022. The 2021 growth forecast is revised up 0.2 percentage point relative to the October 2020 Africa’s Pulse projection.” World Bank said

Higher commodity prices due to rising global demand for commodities, along with continued agriculture sector growth, are expected to  help support a rebound in private consumption and industry and services .

However, the resurgence of the COVID-19 pandemic, fueled by highly transmissible variants, and delayed access to vaccines is seen tempering with the recovery.

WB added that while governments in the region are not expected to reimpose stringent lockdown and containment measures like those in the first half of 2020, the likelihood of restrictions to stem the resurgence of COVID-19 infections before vaccines become widely available is likely to weigh on private consumption and business investment spending.

“The outlook is predicated on the assumption that vaccine coverage would not be sufficient to enable a significant reduction in the domestic economic disruption due to COVID-19 restrictions and self-isolation behaviors in most countries until the second half of 2022. Some countries will be more successful than others in accessing vaccines and distributing these to their citizens, but most people in the region are unlikely to be inoculated before 2022, which will delay the removal of COVID-19 restrictions. Growth is expected to rise to 3.1 percent in 2022, broadly unchanged from the October 2020 forecast, as the pace of vaccine deployment accelerates across the region, providing a stronger boost to consumer and business confidence,” WB noted

The strength of the recovery is also seen varying across countries and sub regions depending on whether countries experienced a severe health crisis, the extent of disruptions to domestic economic activity, the importance of contact-intensive sectors in the domestic economy, cross-border spillovers, and the effectiveness of policy support.

Meanwhile following a 3% contraction in 2020, economic activity in East and Southern Africa is projected to expand by 2,5% in 2021 and 3,3% percent in 2022.

Delayed vaccine rollout and modest growth prospects in South Africa and Angola—East and Southern Africa’s two largest economies—owing to persisting structural constraints are seen weighing on the sub region’s recovery.

Growth in South Africa is expected to resume in 2021, driven by a rebound in global activity, including higher demand for South Africa’s commodity exports.

“ However, restrictions imposed to curb a second wave of COVID-19, fiscal tightening, high unemployment, along with power cuts will prevent a stronger recovery. South Africa’s real GDP is expected to rebound from an estimated 7.0 percent contraction in 2020 to growth of 3.0 percent in 2021, slightly up from 2.6 percent in the October forecast. Growth is projected to moderate to 1.9 percent in 2022, as preexisting structural constraints, such as electricity shortages, persist,” WB Noted

Louis Schoeman

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