As Africa countries continue to struggle with the ripple effects of the COVID-19 pandemic of their economies, and wider society, even as many are buried under growing debts, a new UN report has warned that the devastating impacts of the pandemic on Africa will be felt for many years unless some actions are taken.
The report, the World Economic Situation and Prospects 2021, launched March 31, 2021, warned that unless smart investments in economic, societal and climate resilience to ensure robust and sustainable recovery of the global economy are made, the devastating socio-economic impact of the COVID-19 pandemic will be felt for many years.
According to the report, in 2020, the world economy shrank by 4.3 per cent, over two and half times more than during the global crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020.
It noted that developed economies, projected to see a 4 per cent output growth in 2021, shrank the most, by 5.6 per cent, due to economic shutdowns and subsequent waves of the pandemic, increasing the risk of premature austerity measures that would only derail recovery efforts globally.
Developing countries, it said, saw a less severe contraction at 2.5 per cent, with an expected rebound of 5.6 per cent in 2021. However, economic contraction among developing nations, falling exports and local consumption rates as well as high levels of public debt will significantly increase poverty levels, the report said.
The report points out further that African countries are experiencing an unprecedented economic downturn with major adverse impacts on development.
“Lower commodity prices, the collapse of tourism and lower remittances – exacerbated by much-needed domestic lockdowns and other measures to control the spread of the pandemic – have caused a severe and widespread deterioration of the economic situation. Limited fiscal space, challenging financing conditions and rising public debt have increased the risks of debt distress,” it said.
According to the report, sustained recovery from the pandemic will depend not only on the size of the stimulus measures, and the quick rollout of vaccines, but also on the quality and efficacy of these measures to build resilience against future shocks.
The report also highlights the need for African countries to prioritize the diffusion of digital technologies, supported by the expansion of affordable and universal digital infrastructure. An effective framework for the implementation of the African Continental Free Trade Area could also become a major tool for promoting intra-African trade, food security and productivity.
The report was produced by the UN Department of Economic and Social Affairs (DESA), in partnership with the UN Conference on Trade and Development (UNCTAD), and the five UN regional commissions. The UN World Tourism Organization also contributed to the report.
By Emmanuel K. Dogbevi
Copyright ©2021 by NewsBridge Africa
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.