Oliver Kazunga, Senior Business Journalist
The African Development Bank (AfDB) has forecast that the southern African region will see an economic rebound next year if the region is successful in containing the Covid-19 pandemic.
Since its emergence, Covid-19 has remained a major obstacle to development progress in the region with a negative impact on businesses and ordinary citizens.
In a last statement, the regional financier noted that as elsewhere on the continent, the pandemic will be a decisive factor for the economic fortunes of the region.
âIf all goes well and that includes a successful vaccination campaign and health measures such as social distancing and wearing masks, Southern Africa is expected to grow by 3.2% in 2021 and 2.4% in 2022 â, declared the AfDB.
He said the projections were notable compared to last year, when the region suffered a 6.3% contraction, Africa’s worst.
Central Africa experienced the second worst regional economic contraction at 2.6 percent. The bank’s chief executive for the Southern Africa region, Ms. Leila Mokaddem, said the pandemic had left a deep impression among the 13 countries covered by the Southern Africa Economic Outlook report.
Countries include Angola, South Africa, Namibia, Zambia, Malawi, Madagascar, Mozambique, Lesotho, eSwatini and Zimbabwe.
“The magnitude of the socio-economic impact of the Covid-19 pandemic on the countries of southern Africa cannot be overstated – increasing poverty, inequality and unemployment among other economic ailments,” said she said during the recent launch of the Southern African Economic Outlook.
Ms Mokaddem told government officials, economists and partner representatives who attended the session that despite the current low infection rates, the situation remains fluid given threats of new waves of Covid-19 and virulent variants. .
The effects of the pandemic on production were most pronounced in countries heavily dependent on tourism such as Botswana, Mauritius, Namibia and Zimbabwe. The same was true for countries that depend on commodity exports.
Going forward, the lack of economic diversity could stifle the recovery.
Ms Mokaddem said that raw materials play an oversized role in many economies in the region such as Angola, Mozambique and Zambia.
AfDB Country Economic Department Director Dr Emmanuel Pinto said the region’s economic performance fits into the larger framework of Africa and the world as a whole.
All regions of the continent except one, East Africa, recorded growth in 2020.
Overall, Africa has experienced one of its worst recessions in decades.
âThe good news is that there is a recovery and the outlook is positive. . . The very good news is that the three largest economies – Nigeria, South Africa and Egypt are recovering, âhe said.
The AfDB said weak growth in South Africa, the region’s largest economy, has spread to its neighbors, who depend on the former for manufactured goods and as a market for their production inputs.
However, regional inflation is expected to moderate from around 14.2% this year to 6.5% in 2022, improving growth prospects.
The region’s debt outlook is of moderate concern, as spending related to the pandemic has led to increased public spending.
Gross public debt is expected to increase slightly. Bank experts are proposing a number of short, medium and long term policies to restore Southern African economies to health.
These include targeted support to severely affected sectors such as tourism, the removal of trade bottlenecks and the introduction of effective social protection programs.
Meanwhile, the AfDB aims to raise US $ 10 billion in 2022 from the capital markets through a borrowing program, which will strengthen its operations.
The regional financier is active in a variety of international capital markets, including the US dollar, euro, Australian dollar and British pound.
âAfDB’s 2022 borrowing program was approved by the Board of Directors on December 14, and the bank expects to raise up to $ 10 billion in capital markets,â AfDB said.
The bank said it will continue to solidify its environmental, social and governance (ESG) footprint by issuing green and social bonds, which this year included its very first social bond.
The regional financier also used its âHigh 5â strategic priorities as a platform to issue 29 thematic bonds, including Integrate Africa, Feed Africa, Improve the quality of life of the peoples of Africa, Industrialize Africa and Light Up and Power Africa.
“The bank will continue to promote the development and deepening of African capital markets by issuing debt denominated in local currency to facilitate the financing of its operations in local currency alongside other initiatives,” he said. declared. – @KazungaOliver.