The World Bank says global economy is expected to grow by 4 per cent in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year.
It said this in a statement issued in Washington D.C. on Tuesday at the presentation of the January 2021 Global Economic Prospects.
It added that the said recovery would likely be subdued unless policy makers moved decisively to tame the pandemic and implement investment-enhancing reforms.
The bank also said that growth in Sub-Saharan Africa was forecast to rebound moderately to 2.7 per cent in 2021, while Nigeria’s growth was expected to resume at 1.1 per cent.
For the region, it said that while the recovery in private consumption and investment was forecast to be slower than previously envisioned, export growth was expected to accelerate gradually, in line with the rebound in activity among major trading partners.
“Expectations of a sluggish recovery in Sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity.
“The pandemic is projected to cause per capita incomes to decline by 0.2 per cent this year, setting Sustainable Development Goals (SDGs) further out of reach in many countries in the region.
“This reversal is expected to push tens of millions more people into extreme poverty over last year and this year,” it stated.
For Nigeria, it said activity was anticipated to be dampened by low oil prices, Organisation of Petroleum Exporting Countries (OPEC) quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures and subdued foreign investor confidence.
It, however, said that the rebound in Africa was expected to be slightly stronger, although below historical averages among agricultural commodity exporters, adding that higher international prices for agricultural commodities were expected to sustain activity.
Projecting risks for the region, it said that they were tilted to the downside as growth in major trading partners could fall short of expectations.
It said that wide scale distribution of a COVID-19 vaccine in the region would likely face many hurdles, including poor transport infrastructure and weak health systems capacity.
“Such constraints, compounded by natural disasters such as recent devastating floods and rising insecurity, particularly in the Sahel, can delay recovery.
“Government debt in the region has increased sharply to an estimated 70 per cent of Gross Domestic Product (GDP) in 2020, elevating concerns about debt sustainability in some economies.
“Banks may face sharp increases in non-performing loans as companies struggle to service their debt due to falling revenues.
“Lasting damage of the pandemic can depress growth over long term through the chilling effects of high debt on investment, the impact of lockdowns on schooling and human capital development, and weaker health outcomes,” it said.
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