Analysts say Africa is expected to see a subdued economic recovery in 2021 and not likely to reach 2019 growth levels until 2022.
At the African Trade Insurance Agency’s Annual Investor Roundtable, investors, risk analysts and African governments weighed in on the prospects for the region to recover from the impacts of COVID-19.
They projected that debt defaults would likely be contained to a small subset of countries with little chance of contagion spreading to other countries in the region.
Speaking, ATI’s newly appointed Chief Executive Officer, Manuel Moses, stressed on the importance of partnerships to help African economies recover from the unprecedented pandemic.
He reiterated that ATI was focused on lending more support to the most vulnerable economies, which the company plans to do through rapid membership expansion in the coming months with the support of partners like the European Investment Bank and the African Development Bank.
The session also revealed several key factors that should guide the continent’s recovery.
One of such was that multilaterals should rethink their approach to supporting sovereigns by focusing on financing social as well as more traditional infrastructure development projects that will not include sovereign guarantees.
The International Monetary Fund had estimated that $345bn would be required in the next three years to help countries fully recover from the economic impacts of COVID-19.
Countries likely to be the most resilient, the analysts said included Senegal and Uganda, which had sound fiscal and monetary policies in place before the pandemic.
On the contrary, countries already vulnerable before the pandemic were predicted to be far worse with average debt burdens rising to 60 per cent of gross domestic product in 2020 compared to 40 per cent in 2015.
