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Oil exporting African nations to record $115m output losses -World Bank

…Growth to shrink by 3.3%

The World Bank has released its Africa Pulse Report 2020, advising oil producing countries in Africa to brace for at least $115 million in output losses this year, just as it predicted that real Gross Domestic Product (GDP) will fall by more than four percent due to contractions in Angola and Nigeria and the concomitant low level economic activities.

The global bank also predicted a slump in economic growth springing from ravaging COVID-19 pestilence that has not only jolted the continent, but likely to push it into its first recession in 25 years.

Speaking at the launch of the report and SSA bi-annual macroeconomic analysis, Albert Zeufack, World Bank’s Chief Economist for African regions, said; “What is clear from our report is that we have a sharp contraction in economic activities. The COVID-19 has taken a large toll on African economies and it’s threatening to erase a decade of hard earned economic progress in the continent,” Zeufack said.

“Gross domestic product (GDP) per capita will record a decline of close to six percent in 2020 and by 2021, GDP per capita would have decreased to the level where it was in 2007, that’s 13 years of progress completely erased.

“A number of African countries, in fact, most of them, will emerge from the crisis with deeper fiscal deficit and debt burden.

“Fiscal deficit will increase by 3.5 percent across the continent. Debt is likely to reach 67 percent in 2021 and that makes it dangerous.”

The bank further said that the pandemic could drive up to 40 million people into extreme poverty in Africa in 2020, erasing at least five years of progress in fighting poverty.

Zeufack, however, said: “The road to recovery may be long, and it may be steep, but prioritizing policy actions and investments that address the challenge of creating more, better and inclusive jobs will pave the way for a faster, stronger and inclusive recovery for African countries”.

According to the Africa Pulse report, the road to recovery requires massive investments across countries, as well as financial support from the international community.

“Several countries, including South Africa, Nigeria, and Ethiopia, have already begun implementing long-needed reforms in energy and telecommunications spurred by the current crisis, and 25 percent of African firms have accelerated the use of digital technology and increased investments in digital solutions,” it noted.