Sub-Saharan Africa will post its first recession in 25 years as the coronavirus pandemic brings economies to a halt and disrupts global trade, the World Bank said.
Gross domestic product in the region will probably contract 2.1%-5.1% in 2020, the Washington-based lender said in an emailed copy of its Africa Pulse report on Thursday. Growth was 2.4% in 2019.
“The Covid-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” Hafez Ghanem, World Bank Vice President for Africa, said in a statement accompanying the report.
The growth downgrade is based on risks including a sharp decline in output in key trading partners, such as China and the euro area, falling commodity prices, reduced tourism, and measures taken to contain the virus, the World Bank said.
It estimates the virus outbreak will cost Sub-Saharan Africa between $37 billion and $79 billion in output losses due to disruption to trade and value chains, reduced foreign investment and aid.
The pandemic is also hitting the region’s three biggest economies — Nigeria, South Africa and Angola — at a time when growth was already weak and oil prices and other commodities have declined, the World Bank said.
“We are rallying all possible resources to help countries meet people’s immediate health and survival needs while also safeguarding livelihoods and jobs in the longer term — including calling for a standstill on official bilateral debt service payments,” Ghanem said.