African Development Bank Sees 2021 Growth Rebound, Cautions on Growing Inequality

PUBLISHED: Mon, 15 Mar 2021 13:24:50 GMT
African Development Bank
CNBC Africa
Key Points
  • Africa’s GDP is expected to grow by 3.4 percent in 2021 after shrinking by 2.1 percent in 2020 because of the COVID–19 pandemic. This recovery will mark the end of the worst recession in more than half a century and will be underpinned by an expected resumption of tourism, a rebound in commodity prices, and a rollback of pandemic-induced restrictions.
  • COVID–19 effects could reverse hard-won gains in poverty reduction over the past two decades. Revised estimates show that up to 38.7 million more Africans could slide into extreme poverty in 2020–21, pushing up the total to 465.3 million people, or 34.4 percent of the African population, in 2021.
  • In the short term, the average debt-to-GDP ratio in Africa is expected to increase significantly to over 70 percent, from 60 percent in 2019. Most countries in Africa are expected to experience significant increases in their debt-to-GDP ratios for 2020 and 2021, especially resource-intensive economies.

The African Development Bank says African growth will rebound this year, recovering from its first recession in 50 years. In its flagship African Economic Outlook report, Africa’s biggest development bank noted tourism dependent economies, oil exporters and resource rich nations had been the hardest hit by the pandemic.

The 2021 edition of the African Economic Outlook focuses on debt resolution, governance, and growth in Africa. Chapter 1 examines Africa’s growth performance and outlook amid the COVID–19 pandemic. The chapter emphasizes policy options to mitigate the effects of the pandemic in the short, medium, and long terms. Chapter 2 explores the causes and consequences of Africa’s debt dynamics by showing how the changing structure and composition of debt create vulnerabilities. In chapter 3, the report takes stock of the challenges in the current global architecture for debt resolution and explores the link between governance and growth with an emphasis on proposed reforms to improve the processes of debt resolution, governance, and sustainable growth.

Read and download the full report below:

African Economic Outlook 2021 by CNBC Africa on Scribd

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