Page 7 - AfrElec Week 40 2021

AfrElec COMMENTARY AfrElec

World Bank warns of slow recovery,

climate problems in Africa

AFRICA THE World Bank has raised its 2021 growth but necessary structural reforms, such as the
forecast for sub-Saharan Africa (SAA) to 3.3%, unification of exchange rates in Sudan, fuel sub-
one percentage point higher than its April sidy reform in Nigeria, and the opening of the
forecast telecom sector to the private sector in Ethiopia.
The rebound is currently fuelled by elevated Additionally, thanks to prudent monetary
commodity prices, a relaxation of stringent pan- and fiscal policies, the region’s fiscal deficit, at
demic measures, and recovery in global trade, 5.4% of GDP in 2021, is expected to narrow to
but remains vulnerable given the low rates of 4.5% of GDP in 2022 and 3% of GDP in 2023.
vaccination on the continent, protracted eco-
nomic damage and a slow pace of recovery, the COVID-19 response
bank said. However fiscal discipline, combined with lim-
The bank also warned that sub-Saharan Afri- ited fiscal space, has prevented African countries
can countries are also faced with the worsening from injecting the level of resources required to
impacts of climate change. launch a vigorous policy response to coronavirus
According to analysis in the Pulse, the World (COVID-19).
Bank’s twice-yearly economic update for the Apart from mounting fiscal pressures and
region, growth for 2022 and 2023 will also rising debt levels as they implement measures
remain just below 4%, continuing to lag the for a sustainable and inclusive economic recov-
recovery in advanced economies and emerging ery, sub-Saharan African countries are also
markets, and reflecting subdued investment in faced with worsening impacts of climate change.
SSA. The Pulse authors advise that just as the
“Fair and broad access to effective and safe countries have used the crisis to introduce
COVID 19 vaccines is key to saving lives and reform measures, they should also harness
strengthening Africa’s economic recovery. this opportunity to make sustainable, resilient
Faster vaccine deployment would accelerate transitions towards low-carbon economies that
the region’s growth to 5.1% in 2022 and 5.4% in can provide long-term benefits in the form of
2023 – as more containment measures are lifted, reduced environmental hazards as well as new
boosting consumption and investment,” said economic development openings.
Albert Zeufack, chief economist for Africa at the The reports highlights Africa’s unique con-
World Bank. text of low baseline development, pre-existing
The analysis shows that current speeds of eco- climate vulnerabilities, limited energy access,
nomic recovery in the region are varied, with the and high reliance on climate-sensitive sectors as
three largest economies, Angola, Nigeria, and posing challenges but also providing opportuni-
South Africa, expected to grow by 0.4%, 2.4%, ties to transform the economy and create jobs.
4.6% respectively. Private firms and governments in Africa are
Excluding South Africa and Nigeria, the rest providing training for jobs in solar energy (Togo
of SSA is rebounding faster at a growth rate of and South Africa).
3.6% in 2021, with non-resource-rich countries Investments in climate-smart infrastructure
like Côte d’Ivoire and Kenya expected to recover can help cities create jobs. Decarbonisation is an
strongly at 6.2 and 5.0% respectively. opportunity to foster manufacturing activity in
A positive trend, according to the report the region, including the production of compo-
authors, is that African countries have seized the nents of the Internet of Things, value-addition
opportunity of the crisis to foster structural and to minerals that will power the green economy,
macroeconomic reforms. and insertion into regional value chains.™
Several countries have embarked on difficult

Week 40 07•October•2021 www. NEWSBASE .com P7