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UN says Africa faces severe debt crisis, unveils economic solution

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The United Nations (UN) has declared that African countries need strong policies and further support from the international community to avert a debt crisis.

This was contained in a statement issued by the UN Department of Global Communications, on Wednesday, March 31.

The statement was jointly signed by Devi Palanivelu, UN Department of Global Communications; and Helen Rosengren, UN Department of Economic and Social Affairs.

The statement read that the impact of the pandemic would be felt for years to come, unless smart investments in economic, societal and climate resilience were made to ensure a robust and sustainable recovery of the global economy.

The UN explained that despite the relatively few number of cases compared to the number of cases in other continents, the COVID-19 pandemic would continue to strongly impact on living conditions and development progress in Africa.

According to international body, the crisis was already increasing unemployment, poverty and inequality, such that most countries were already facing enormous challenges to keep the pandemic under control and mobilize financial resources to support health systems, protect vulnerable groups, and support the recovery.

Nigeria’s GDP is projected to expand by 1.5 per cent in 2021, after a contraction of 3.5 per cent in 2020, according to the report.

Yet, the UN noted that tighter foreign exchange liquidity, mounting inflationary pressures and subdued domestic demand cloud its medium-term outlook.

In South Africa, GDP is projected to expand by 3.3 per cent in 2021, after a contraction of 7.7 per cent in 2020.

The UN also projected that a strong and sustained recovery remained uncertain, amid power shortages, elevated public debt and policy challenges.

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Egypt’s GDP was estimated to have grown by 0.2 per cent in 2020; and in 2021.

GDP growth is projected to climb to 5.4 per cent, underpinned by a strong recovery of domestic demand and facilitated by the absence of severe balance-of-payments constraints.

Also, after a contraction of 0.5 percent in 2020, the Ethiopian economy is projected to expand by only 2.3 percent in 2021.

The UN, however, noted that while agricultural exports were showing resilience, the tourism sector would remain restrained throughout 2021.

 

 

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  1. Pingback: UN Says Africa Faces Severe Debt Crisis, Unveils Economic Solution | Techvalley

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