Djibouti – With the global shutdown having impacted countries that account for over 80 percent of global GDP, the World Trade Organisation (WTO) recently warned that, as a worst-case, trade could collapse by the end of this year.
However, it is believed that Africa’s economic growth could rebound in 2021 if governments manage the COVID-19 infection rate well. The bank cautioned that the growth outlook for 2021 and beyond would depend largely on African governments’ effectiveness in flattening the curve of the outbreak and policies to reopen its economies.
Charles Leyeka Lufumpa, who is the Acting Chief Economist and Vice President for Economic Governance and Knowledge Management, at the African Development Bank, asserted that to reopen economies, policymakers needed to follow a phased and incremental approach that carefully evaluates the trade-offs between restarting economic activity too quickly and safeguarding the health of the population.
He further clarified that these economic activities can be restarted incrementally on the basis of the transmission risks of different sectors.
There are bold actions that African banking leaders can take to weather the immediate storm, prepare for the recovery, and address several long-term trends that are now accelerating. For many banks, the crisis will also be a prompt to reimagine their business models and role in society, and in some cases conduct overdue reforms. Although, in a comprehensive socio-economic assessment of the pandemic’s impact, the Bank said growth was now projected to rebound to 3 percent in 2021 from -3.4 percent in the worst-case scenario for 2020.