Coronavirus may cause Africa's first recession in 25 years: World Bank

We project that economic growth in Sub-Saharan Africa will decline from 2.4 per cent in 2019 to -2.1 to -5.1 per cent in 2020, said World Bank

The World Bank on Thursday warned sub-Saharan Africa could slip into its first recession in a quarter of century because of the coronavirus pandemic.

"We project that economic growth in Sub-Saharan Africa will decline from 2.4 per cent in 2019 to -2.1 to -5.1 per cent in 2020, the first recession in the region in 25 years," the Bank said in an analysis.

“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,” said Hafez Ghanem, World Bank Vice President for Africa.

“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 which would free up funds for strengthening health systems to deal with Covid-19 and save lives, social safety nets to save livelihoods and help workers who lose jobs, support to small and medium enterprises, and food security,” he added.

According to the latest Africa’s Pulse, the World Bank’s twice-yearly economic update for the region, shows that the pandemic will cost the region between $37 billion and $79 billion in output losses for 2020 due to a combination of effects, which includes trade, commodity exporting, foreign direct investments, foreign aid and health systems.