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UN says Africa’s economic growth to dip by 4.1% in 2020, rebound by 5% in 2021

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The United Nations (UN) has projected that Africa’s economy will rebound by 5% in 2021 after declining by 4.1% in 2020 due to the effects of the pandemic.

The UN Economic Commission for Africa (ECA) disclosed this in a report titled: “Innovative finance for private sector development in Africa,” on Tuesday, December 15.

The report read in part that Africa will need US$44 billion for the testing, personal protective equipment for frontline medical staff, equipment, and treatment of the coronavirus (COVID-19).

The commission added that Africa’s economic revival would need effective policies to combat the pandemic, also compounded by global actions to fight the pandemic.

The forecast was that as Africa increases Health spending to sustain their health systems and absorb costs related to the COVID-19 lockdowns, the continent will need US$44 billion for the testing, treatment and hospitalization of Covid-19 patients

The pandemic will force between 5 to 29 million people into extreme poverty compared with a baseline 2020 African growth scenario, according to ECA projections.

The international body called for more investment in African infrastructure and innovation, citing poor innovation which affects Africa’s production abilities and reduced education quality.

According to the body, the estimated financing gap is US$2.5 trillion for all emerging and developing countries and US$200billion to US$1.3trillion for Africa and urges the continent to invest in human capital to bridge the gap.

The UN added that it is due to Africa’s population growth of 43% over 2015–2030, the gap could reach US$19.5 trillion by 2030.

The commission said Africa had the second-fastest growing economy in the world in 2019, however, the pandemic would affect growth between 1.8% and -4.1% in 2020.

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The body, however, called for more banking reforms to reduce the effects of monetary crisis, and also to boost private sector-led investment in the continent through stronger equity and debt capital

 

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