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UPDATE 2-Sub-Saharan Africa to contract 3.3% this year, World Bank says

Published 08/10/2020, 08:08
Updated 08/10/2020, 09:06

(Updates with more details)
By Duncan Miriri
NAIROBI, Oct 8 (Reuters) - The coronavirus crisis is
expected to drive a 3.3% contraction in sub-Saharan African
economies in 2020 and could push 40 million people into extreme
poverty, the World Bank said on Thursday.
The Washington-based lender said growth in the region would
recover in 2021, with economies growing by 2.1%, below 2019's
growth of 2.4%.
"The COVID-19 pandemic has taken a large toll on economic
activity in sub-Saharan Africa, putting a decade of hard-won
economic progress at risk," the bank said.
Apart from South Africa, the region appears to have so far
escaped the worst of the health crisis, accounting for 3.4% of
global infections and 2.5% of deaths, but the World Bank warned
of potential risks from the virus.
"Great uncertainty surrounds the scale and trajectory of the
pandemic in the region," it said, citing the experience of
European nations and the United States, which are going through
a second wave of infections.
The pandemic is expected to regress the economic output per
person to 2007 levels by the end of next year, the bank said,
and disrupt learning for 235 million students.
This year's economic growth is expected to be hit by the
lockdowns put in place by governments to curb the spread of the
virus, and the impact of the global slowdown.
"Disruptions in the tourism industry and lockdowns will
cause substantial slow-downs in Ethiopia, Kenya, and the island
nations," the World Bank said.
Economies which are not overly reliant on commodities, like
Ivory Coast, Ghana and Senegal, will be spared from steep
contractions, thanks to fairly robust outputs in their farming
sectors, the bank said.
Governments in the region should take steps to boost their
capacity to recover from the impact of the crisis, the World
Bank said.
"Countries need to reconstitute their fiscal space to
finance programs that can stimulate recovery, improve debt
management, and fight corruption," the lender said.



(Editing by Raissa Kasolowsky)

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