ABIDJAN, Côte d'Ivoire
Africa's economy should return to growth in aggregate across the continent in 2021 after a coronavirus recession, the African Development Bank said Friday, while warning that poverty and public debt would continue to rise.
The
2.1-percent contraction of the pan-African economy in 2020 was the first
recession in half a century, but should give way to expansion of 3.4 percent
this year, the AfDB said in the 2021 edition of its African Economic Outlook
report.
At 3.1
percent, the International Monetary Fund's forecast was less optimistic than
the AfDB, whose mission is to fund investment in African countries and offer
advice and technical assistance to development.
The
development bank predicted the strongest rebound for economies like Morocco,
Tunisia and Mauritius that depend on tourism, at 6.2 percent -- although their
GDP fell the furthest last year.
Meanwhile
oil and raw materials exporters like Algeria, Nigeria, Angola and South Africa
should enjoy growth around three percent, and the continent's most diversified
economies like Ethiopia and Ivory Coast rise by 4.1 percent, having already
suffered a softer 2020 blow.
The AfDB
report also highlighted that 39 million more people could slip below the
extreme poverty threshold of $1.90 per day this year, up from an estimated 30
million last year.
A total
of 465 million people in Africa could be affected by extreme poverty, one-third
of the continent's population, in a setback after two decades of steady
reductions.
Meanwhile
"the pandemic shock and ensuing economic crisis have had direct
implications for budgetary balances and debt burdens," the AfDB warned.
Deficits
roughly doubled last year, to around 8.4 percent of GDP, while the average
debt-to-GDP ratio on the continent is expected to surge by between 10 and 15
percentage points, to around 70 percent.
By
December, 14 of 38 countries analysed for debt sustainability were judged
"in high risk of debt distress", with 16 seen as moderate risk and
just two at low risk.
"Serious
debt challenges might be looming, and disorderly defaults and lengthy
resolutions could become a major obstacle to Africa’s progress toward
prosperity," AfDB president Akinwumi Adesina wrote in the report.
"We
need to address Africa's debt and development finance challenges, in
partnership with the international community" and with private creditors,
he added.
But
Adesina also urged leaders to enact "bold governance reforms to eliminate
all forms of leakages in public resources, improve domestic resource
mobilisation, and enhance transparency". - AFP
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