The Gross Domestic Product- GDP, of Sub-Saharan Africa is expected to contract by 3.1 percent this year due to lockdowns measures that disrupted activities
Another factor for the expected economic reduction is the peaking cases of coronavirus in the region but a recovery is expected next year, as disclosed by a Reuters poll, last Friday.
In addition, the forecast expects the continent to recover to around 3.5% growth in 2021.
After several months of quarantine measures, most economic activities have been struggling to recuperate as major economies in SSA have majorly driven by oil, mining, manufacturing, and tourism.
Unfortunately, these leading sectors have been grounded by global lockdown measures and low operations in the aviation sector.
Although some countries in the region have begun easing restrictions, the virus is on the rise in SSA compared to many developed countries that have started showing signs of recovery.
South Africa, which holds the highest number of cases in SSA with 408,052 cases, might experience economic growth of 3.5 percent next year. This follows an 8.0 percent contraction this year, as shown by a Reuter poll.
“Growth downgrades dominate in a region where external and fiscal buffers were already substantially eroded. The impact of COVID-19 will reduce growth even further,” Standard Chartered wrote in a note.
Africa’s giant, Nigeria has 38,948 confirmed cases of coronavirus and the numbers are still on the rise, regardless the country has loosened lockdown measures to permit more economic activities.
The Reuters poll hinted that the west African country will experience a contraction of 3.7% this year but will possibly bounce back to a growth of 2.0 percent in the following year.
Ghana which has an economy that is largely driven by oil revenue is predicted to have a growth of to 1.9% this year and 4.2% in 2021.
“Despite the obvious downside risks from lower oil prices and headwinds from COVID-19, we believe Ghana has a decent growth outlook and reasonably comfortable external sector metrics relative to other African oil exporters,” said Michael Kafe, an economist at Barclays.
