Africa’s Gross Domestic Product (GDP) is projected to decline by $173 – $236 billion by the end of 2020.
The decline in GDP according to President of the African Development Bank, Akinwumi Adesina, is as a result of the expected 3.4 per cent decline in the Continent’s economic growth on the back of the Coronavirus pandemic.
Mr Adesina made the assertion while delivering a keynote speech at the 2020 Virtual International Forum on African Leadership.
Speaking on the theme; “Rethinking Global Partnerships and Africa’s Economic Resurgence,” Dr Adesina stated that, with the advent of the Coronavirus pandemic, the world now lives in an unprecedented and challenging times noting that the world has become more fragile.
“The world has become more fragile as we all face common existential risks. All are affected, developed and developing countries. There’s no coronavirus for developed countries and coronavirus for developing countries,” he said.
“Our greatest test and task is to build effective partnerships and reinforce leadership to navigate through the pandemic, save as many lives and possible, reverse the trend, and put the world and its economies back on more resilient recovery pathways,” he added.
Speaking further at the event, Dr Adesina stated that the African Development Bank in the wake of the pandemic showed leadership and responsiveness in supporting African countries address the pandemic with the release of more than $10 billion funds.
“The Bank launched a $10 billion crisis response facility to support countries’ immediate needs for liquidity,” he averred.
“The Bank also launched a $3 billion fight COVID-19 social bond on the global capital markets, the largest US dollar denominated social bond ever in world history,” Dr Adesina further intimated.
According to him, the speed and quality of the economic recovery process for African countries from the pandemic, will depend on the shared sense of collective responsibility and the financial capacity of developing countries to address immediate shocks, stabilize their economies, and invest in growing back.
The projected 3.4 per cent decline in GDP for 2020 according to the World Bank, has pushed the continent into its first recession in the last 25 years.
The pandemic, according to the World Bank has driven more than 110 million people into extreme poverty, erasing at least five years of progress in fighting poverty.
Nigeria’s real GDP contracted by 6.1 percent year-on-year in the second quarter of 2020—the worst result in more than a decade.
South Africa, operating under severe containment measures, saw its real GDP contract by 17.1 percent year-on-year in the second quarter of 2020.
The substantial downturn in economic activity will cost the Sub-Saharan region at least $115 billion in output losses this year.
Gross domestic product per capita growth is expected to contract by nearly 6.0 percent, in part caused by lower domestic consumption and investment brought on by containment measures to slow the spread of the coronavirus pandemic.
