The African Development Bank (AfDB) has said it expects African economies to grow by an average rate of 3.4 per cent this year as the continent recovers from its worst contraction in half a century.
AfDB in its 2021 Economic Outlook Report noted African economies contracted by 2.1 per cent in 2021 as the pandemic disrupted economic activity across the continent.
According to the multilateral bank, an estimated 39 million Africans are likely to slip into extreme poverty as a result of the COVID-19 pandemic.
“The continent-wide projected recovery does not remove the threat of increasing poverty, populations with lower levels of education, few assets, and working in informal jobs are the most affected and must be protected,” said the report.
Governments on the continent boosted their spending last year in an effort to support their economies through the crisis, putting pressure on budgetary balances and debt burdens.
“The average debt-to-GDP ratio for Africa is expected to climb by 10 to 15 percentage points in the short to medium term,” the AfDB said.
The worsening outcomes will be driven by the surge in government spending and the contraction of fiscal revenues caused by the pandemic.
The AfDB called on the international community to work with policymakers on the continent to help it deal with debt loads that are getting heavier and heavier.
“Africa’s debt burden must be prioritised and not ignored, the time for one last debt relief drive for Africa is now,” the report further stated.
