Nearly 50 million Africans could be forced into extreme poverty because of the economic consequences of the outbreak of coronavirus, believes the african development Bank (AFDB) in a report released on Tuesday.
While the forecast predicted that a third of Africans, or 425 million people, live below the poverty line (with less than 1.90 dollar per day in purchasing power parity) by 2020, the impact of the pandemic is expected to greatly exacerbate the situation, considers the ADB in its ” African economic Outlook “.
Africa is, after Oceania, the continent least affected by the pandemic Covid-19, with close to 500,000 cases, of which nearly 11 700 deaths, according to a count by the AFP on 7 July. However, the continent is hit by the global economic crisis caused by the epidemic.
“Between 28,2 and 49.2 million Africans could be forced into extreme poverty” this year and next year, according to the scenarios “baseline” or “pessimistic” of the BAD, depending on the duration and magnitude of the economic recession.
The african institution of development, based in Abidjan, is forecasting a significant recession for the continent, with a GDP contraction of 1.7% to 3.4% this year. That is, a loss of 5.6 to 7.3 points compared to the growth forecasts before the crisis Covid-19, which were largely positive.
The international monetary Fund (IMF) had referred to the end of June a recession of 3.2% this year for sub-saharan Africa, and a decrease in the revenues of the inhabitants to their 2010 levels.
According to the ADB, between 24.6 and 30 million jobs will be lost this year.
This is Nigeria, the most populous country in Africa with 200 million inhabitants, which is expected to see increase, the more poverty. Between 8.5 and 11.5 million Nigerians were to fall into extreme poverty by 2020, in this country very dependent on its oil sector severely affected by the global economic crisis and the fall in the price of the black gold.
Risk on the debt
Fourth most populous country in Africa, with 90 million inhabitants, the democratic Republic of the Congo (DRC) could see falling into extreme poverty 2.7 to 3.4 million people, while the countries of central Africa already has 72 % of the population living under the threshold of 1.90 dollar per day.
The economy of the DRC suffers from its dependence on exports of minerals, whose prices have fallen on world markets.
In addition to the savings based on the raw materials, that depend on the tourism sector (which represents 8.5 % of the GDP of the continent) will also be severely affected, while the diversified economies will be logically more resilient, ” notes the AFDB.
And the recession by 2020 is expected to reach four of the five largest economies of Africa : South Africa (6.3% at -7,5 % following the baseline scenario or pessimistic), Nigeria (4.4% to 7.2 %), Algeria (4.4% -5,4 %) and Morocco (-3,3 % to 4.6%), while Egypt, to the more diversified economy, is expected to maintain positive growth (+2.2% to +0,8 %).
The medium-sized economic powers, the economies are relatively diversified, should remain in the green : Ethiopia (+3.6% to +2.6 per cent), Kenya (+1,4 % to +0.6 %) Cote d’ivoire (+3 % to +1.5 %) Senegal (+2.8% to +0,1 %).
The crisis of the coronavirus also pose a greater risk to the public debts of african countries, is the BAD.
To limit the socio-economic consequences of the crisis, many african countries have announced significant fiscal stimulus, of up to 10 % of the GDP in South Africa.
Accordingly, budget deficits are “expected to double” on the continent, to achieve 8% to 9% of GDP, while ” many african countries have addressed this crisis with ratios, debt-to-GDP high “. The crisis of Covid-19 ” reinforces the likelihood of a widespread crisis and the deep sovereign debt crisis “, worrying about the BAD.