Global Economic Prospects, June 2020 by The World Bank Group

Author:The World Bank Group
Language: eng
Format: epub

Source: International Monetary Fund (World Economic Outlook); United Nations; World Bank (World Development Indicators)

A.-B. "Industrial-commodity exporters" represents oil and metal exporting countries. Aggregate growth rates calculated using GDP weights at 2010 prices and market exchange rates. "Industrial-commodity exporters" excludes Nigeria and South Africa.

C. Sample includes 48 countries for SSA and 126 for non-SSA EMDEs.

D. TB = Tuberculosis; HIV = Human immunodeficiency viruses. Unweighted averages. “TB incidence” expressed per 100,000 of the population; “HIV prevalence” expressed as percent of the total population. “TB incidence” sample reflects 106 non-SSA EMDEs and 48 SSA economies. “HIV prevalence” sample reflects 70 non-SSA EMDEs and 46 SSA economies.

F. Simple averages of country groups.

Growth in the region is expected to rebound to 3.1 percent in 2021; however, the outlook is subject to substantial uncertainty. The projected pick-up assumes that the pandemic will have faded by the second half of 2020, that domestic outbreaks in the region follow a similar path, and that growth in major trading partners will rebound. Commodity prices are also expected to recover but remain below 2019 levels. However, the pandemic’s progression is particularly hard to predict in Sub-Saharan Africa, as the region faces significant hurdles in containing the virus. These include weak and underfunded health care systems—government per capita spending on health care is about 2 percent of that in advanced economies—and lack of access to basic sanitation (Walker et al. 2020; Figure 2.6.2.C). The region also has large populations with underlying health conditions that elevate their risk of developing complications in case of infection, only partly offset by a relatively young population (Figures 2.6.2.D and E).

Pandemic-control measures such as social distancing and self-isolation are made more challenging to implement by the fact that the majority of workers in most countries are in the informal economy and depend on daily incomes that are insufficient to stockpile food and other essential items (World Bank 2019c, Special Focus 1). For many, living conditions are also not suited to these measures, as more than two-thirds of urban populations live in crowded slums, and necessities like water are often accessed at communal points (World Bank 2020o). Without external assistance, constrained fiscal space across most of the region also limits governments’ ability to respond to the outbreak. The challenges of containing outbreaks and providing fiscal support could both deepen this year’s contraction and significantly delay the expected recovery.

Against this background, activity in Nigeria—the region’s largest economy and most populous country—is expected to shrink by 3.2 percent in 2020. Amid the unprecedented collapse in oil prices, this year’s contraction in activity is set to be the most severe in four decades. The economy depends heavily on oil revenues, which represent over 80 percent of exports, about one-third of banking-sector credit, and one-half of general government revenues. Faced with a twin shock, the country’s slump in activity has been compounded by measures to slow the domestic spread of the virus—including closing of national and state borders, schools, and the temporary shutdown of markets. The oil sector is projected to contract by 10.

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