African economies set to bounce back 3.4 per cent this year as debt fears mount

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African economies set to bounce back 3.4 per cent this year as debt fears mount

African Development Bank Group, the Abidjan, Côte d’Ivoire-headquartered multinational financial institution comprising of three separate entities such as African Development Bank, African Development fund and Nigeria Trust, had issued a statement late on Friday saying that the African economies were expected to rebound by 3.4 per cent on an average this year following a pandemic-battered 2020, spurring up hopes of an economic recovery from the continent’s worst contraction in more than half a century.

Aside from that, the African Development Bank Group (AfDB) was also quoted saying at its 2021 economic outlook report published earlier on Friday that the continent's 54 member states had averaged a contraction of 2.1 per cent last year, as a still-inflaming pandemic outbreak was wreaking havocs on economic activities across the continent, while an approximated 39 million Africans were expected to meet with an extreme poverty due to the pandemic’s fiscal consequences.

Notably, Washington-based World Bank defines extreme poor as the people making their ends meet on less than $1.90 per day.

AfDB warns of lingering poverty in the continent

Apart from that, a number of Governments in the continent stepped up expenses last year in a bid to see through the pandemic crises, which in effect would likely to lead to an increase in debt-to-GDP ratio while piling up pressures on debt burdens and budgetary deficits, suggested analysts.

Meanwhile, raising an alarming bell over the continent’s fiscal outlook, the AfDB said in the report, “The continent-wide projected recovery... does not remove the threat of increasing poverty. Populations with lower levels of education, few assets, and working in informal jobs are the most affected and must be protected.

The average debt-to-GDP ratio for Africa is expected to climb by 10 to 15 percentage points in the short to medium term.