ADDIS ABABA – Africa’s gross domestic product has recovered strongly in the last year, but the lingering effects of the Covid-19 pandemic and Russia-Ukraine war could pose considerable challenges in the medium term, a new regional report claims.
Issued by the African Development Bank Group (AfDB), The 2022 African Economic Outlook report says the Continent’s GDP grew by an estimated 6.9% in 2021.
This is after the continent suffered a pandemic-induced contraction of 1.6% in 2020, says the Bank’s flagship publication.
Rising oil prices and global demand have generally helped improve Africa’s macroeconomic fundamentals, the report finds.
But growth could decelerate to 4.1% in 2022, and remain stuck there in 2023, because of the lingering pandemic and inflationary pressures caused by the Russia-Ukraine war. Both countries are major grain suppliers to Africa.
The AfDB has responded to the likelihood of a looming food crisis with a $1.5 billion fund approved by its executive board last week.
Its president, Akinwumi Adesina, said international efforts, including those of the AfDB, the G20 Common Framework for Debt Treatment, and the $650 billion in Special Drawing Rights issued by the International Monetary Fund, are supporting the continent’s recovery.
However, he said the recovery will still be costly.
“Africa will need at least $432 billion to address the effects of Covid-19 on its economies and on the lives of its people — resources it does not have,” Adesina added.
The report, which highlights a growing threat to lives and livelihoods in Africa, was launched during AfDB’s Annual Meetings in Ghana this week.
The theme of the 2022 African Economic Outlook is “Supporting Climate Resilience and a Just Energy Transition in Africa.”
Acting Chief Economist and Vice President Kevin Urama called Climate change “the most existential challenge” to Africa’s development today.
“Finding policies that address climate adaptation and mitigation of greenhouse gas emissions while ensuring social and economic development is one of the most enduring policy challenges of our time,” said Urama.
The newly released report provides “evidence-based policy options for driving inclusive growth by building climate resilience and a just energy transition in Africa,” he added
The report notes that the pandemic and Russia-Ukraine war could leave a lasting impression over several years, if not as much as a decade.
Meanwhile, around 30 million people in Africa were pushed into extreme poverty in 2021 and about 22 million jobs were lost in the same year because of the pandemic, the report says.
And the trend is expected to continue through this second half of 2022 and on into 2023.
“The economic disruptions stemming from the Russia-Ukraine war could push a further 1.8 million people across the African continent into extreme poverty in 2022,” the report says. That number could swell with another 2.1 million in 2023, it added.
The 2022 African Economic Outlook proposes a series of policy recommendations to build back better and engender resilient economies in Africa.
Proposals include speeding up Covid-19 vaccination and delivering strong support to domestic pharmaceutical industries; reducing reliance on single food sources; and revisiting global debt frameworks.
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