The World Bank is predicting the first recession in 25 years for sub-Saharan African countries amid the coronavirus pandemic. According to the Bretton Wood institution, the region’s economy will shrink by as much as 5.1%.
Moreover, the economic growth in sub-Saharan Africa was projected to decline from 2.4% in 2019 to -2.1 to -5.1% in 2020, the first recession in the region in 25 years.
The report stated that the deadly coronavirus was hitting the region’s three largest economies which include Nigeria, South Africa, and Angola.
Countries that depend on oil and mining exports, including Ghana, is predicted to receive the worse hit during the fight against COVID-19.
The negative impact of the COVID-19 crisis on household welfare would be equally dramatic. As a result, the report stated that leaders and policymakers are to strategies for saving lives and protecting livelihoods.
This strategy includes (short-term) relief measures and (medium-term) recovery measures aimed at strengthening health systems, providing income support to workers and liquidity support to viable businesses.
However, financing of these policies will be challenging amid deteriorating fiscal positions and heightened public debt vulnerabilities, the World Bank explained.
It, therefore, said African countries will require financial assistance from their development partners, including COVID-19-related multilateral assistance and a debt service standstill with official bilateral creditors.
Several African countries are using lockdowns to control the spread of the virus and as a result, some businesses are not as active as they would be.
Meanwhile, Africa would not be the only continent to suffer such a recession as others who have managed to stand firm will receive the impact as well.