African multilateral institution, the African Development Bank (AfDB) has said uncertainty surrounding growth outlook for Africa remains high.
According to the AfDB in its 2021 African Economies Outlook report, this is due to some downside factors that could derail the recovery of the continent.
Such factors the AfDB pointed out include a resurgence of COVID–19 infections, debt overhang, financial market volatility that impedes capital flows, low commodity prices, low tourism and remittances, extreme weather events and social tensions.
On the other hand, upside factors that could result in better-than-anticipated growth for the continent the Bank stated include the effective deployment of therapeutics and vaccines for COVID–19, especially in African countries, full implementation of the Africa Continental Free Trade Agreement, and continued progress in structural transformation, including digitalization and work-from-home arrangements.
Economic impact of the pandemic the Bank says varies across the continent with tourism-dependent economies, oil-exporting economies and other-resource intensive economies being the most hit economies by the pandemic.
AfDB in the report themed From Debt Resolution to Growth: The Road Ahead for Africa, notes that tourism-dependent economies are projected to recover from
an 11.5 percent GDP decline in 2020 to grow by 6.2 percent in 2021; oil-exporting countries, from a 1.5 percent decline to grow by 3.1 percent; and other-resource-intensive economies, from a 4.7 percent decline to grow by 3.1 percent.
Non-resource-intensive countries, where output shrank by 0.9 percent in 2020, are also projected to grow by 4.1 percent in 2021.
African economies, according to the AfDB are expected to grow by an average rate of 3.4 per cent in 2021 after a 2.1 per cent contraction experienced in 2020.
The AfDB has also said the debt-to-Gross Domestic Product (GDP) ratio of African economies on average is expected to climb by 10 per cent to 15 per cent in the short to medium-term.
