The African Development Bank slashed its forecast for economic growth on the continent because of the impact of the coronavirus and now sees gross domestic product contracting by at least 1.7% this year, and double that if the pandemic continues into the second half of 2020.
That new projections released in a supplement to its Economic Outlook on Tuesday compared with a January forecast of 3.9% growth. If the disease isn’t swiftly addressed, Africa faces a major humanitarian and public health disaster, according to the report.
The Abidjan, Ivory Coast-based multilateral lender forecasts a partial recovery to expansion of about 3% next year. However, that won’t make up for an estimated cumulative loss to Africa’s GDP of $173.1 billion to $236.7 billion for 2020 and 2021 due to the pandemic, it said. Tourism-dependent countries, oil exporters and other resource-intensive economies have been hit hardest.
The number of people living in extreme poverty on the continent could increase to 463 million because as many as 30 million jobs may be lost, according to the report. Still, the lender advises that to reopen economies “policy makers need to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population.”
The AfDB is Africa’s biggest multilateral bank. In March, it sold a $3 billion social bond to help countries in the region deal with the fallout from the coronavirus. It also launched a $10 billion crisis-response facility.