(Ecofin Agency) - In a recent report, the International Monetary Fund said GDP in Sub-Saharan Africa is expected to fall at 1.6% this year, down 5.2 pts compared to the initial forecast. This will be the worst result ever, IMF said.
This decline is largely due to the impact of the covid-19 and the sharp decline in commodity prices.
Also, specific factors such as permanent structural constraints observed in some countries such as South Africa, economic policy adjustment in Ethiopia, as well as climatic and other natural shocks such as the locust invasion in East Africa contributed to these downward revisions.
However, the economic consequences of the covid-19 epidemic and low commodity prices are expected to be very pronounced in countries with less diversified economies. For example, IMF notes, in oil-exporting countries, the 1.8% growth in 2019 is expected to fall by 2.8% this year, or 5.3 pts lower than forecast in October 2019.
In Nigeria, the IMF expects growth to shrink by 3.4%, mainly due to the collapse in oil prices and the impact of lockdown and prevention measures on activities.
Growth in the other resource-rich countries is expected to decline by about 5.0 percentage points, from +2.3% to -2.7%. In South Africa, for example, the disruptions caused by the lockdown and prevention measures are expected to exacerbate existing structural constraints, with a growth contraction of 5.8% this year, from 0.2% in 2019.
In resource-poor countries, growth is expected to fall from 6.2% to 2.0%. Tourism-dependent countries (Cape Verde, Comoros, Gambia, Mauritius, Sao Tome and Principe, and Seychelles) are expected to experience a severe downturn, with GDP contracting by 5.1% in 2020 after average growth of 3.9% in 2019.
The Bretton Woods Institution notes, however, that regional growth is expected to pick up to about 4% in 2021. And even assuming that this relatively rapid recovery materializes, the covid-19 pandemic will lead to high and persistent output losses.
In 2024, the IMF even estimates that GDP per capita would be about 4.5% lower than projected before covid-19. The world will experience strong growth contraction, worse than during the 2008-2009 global financial crisis.