Despite COVID-19 Crisis, East Africa Remains the Continent’s Fastest Growing Region

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Despite COVID-19 Crisis, East Africa Remains the Continent’s Fastest Growing Region

African Development Bank has said the economic disruption caused by the novel Coronavirus (COVID-19) pandemic has pushed East Africa’s growth projection for 2020 down to 1.2 percent, a rate that outstripped other African regions and is forecast to rebound to 3.7 percent in 2021.

According to the bank’s East Africa Regional Economic Outlook 2020, the projection is under the baseline scenario that assumes the virus would be contained by the third quarter of this year.

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Prior to the COVID-19 pandemic, the region’s economic growth was projected at more than five per cent, well above continent’s average of 3.3 per cent and global average of 2.9 per cent.

However, the COVID-19-induced shocks and a locust invasion have contributed to job losses, increased humanitarian needs and would aggravate poverty and income inequality.

In the worse-case scenario, in which the pandemic persists until the end of 2020, growth is projected at 0.2 per cent, still above Africa’s predicted average of -1.7 per cent and -3.4 per cent under the two scenarios.

The Regional Economic Outlook indicated that the COVID-19 pandemic would affect East African economies in many ways, such as falling commodity prices and trade, and restrictions on travel with a consequent negative impact on tourism.

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Waning financial flows have affected the region’s fiscal and current account balances, while disruptions in supply chains have hurt food production and distribution. With schools closed, an estimated 90 million learners have been excluded from the classroom.

The report called for urgent policy measures to cushion the effects of the COVID-19 pandemic.

At the launch of the report held recently in Nairobi, Cabinet Secretary of Kenya’s Ministry of Labour, Simon Chelugui, said East African countries could overcome the effects of COVID-19 and turn their economies around by mitigating the external and domestic risks.

“We need to implement a decisive and coordinated response to contain the spread of COVID-19; mitigate its health and socio-economic effects; accelerate structural transformation; improve the investment climate, and maintain the peace and security of our region,” he said.

Also, a Bank Lead Economist, Marcellin Ntah, said: “East African countries should accelerate a real structural transformation by transitioning from low value-added production to higher value-added activities that could mitigate vulnerabilities to domestic and external shocks.”

The report placed emphasis on investigating the impact of the COVID-19 pandemic on the region, with a focus on “Developing East Africa’s Workforce for the Future.”

To nurture skills for the future workforce, there’s an urgent need for broad reforms in education, investment in education technology, addressing factors that stop children from attending school and establishing linkages between academia and industry, said a Bank Lead Economist, Edward Sennoga.

Also, the Director General of the bank’s East Africa Regional Office, Nnenna Nwabufo, pledged African Development Bank’s support to steer the region out of the crisis.

“Our ambition is to address the adverse effects of the COVID-19 pandemic and ensure that social and economic development across the continent is accelerated, through the creation of an African workforce of the future,” she said.

She noted that the bank has responded swiftly to provide urgently needed support to address the immediate impacts of the COVID-19 pandemic, including support of $212 million to Kenya, $165 million to Ethiopia, $4 million to South Sudan and $10 million to Seychelles.

Nwabufo called for a collective effort to address the development challenges such as COVID-19, rising public debt, and the locust invasion, in order to re-direct the nations towards a sustainable development pathway.

To the Executive Director of the Civil Society Advocacy Group in Uganda, Julius Mukunda, to nurture growth, East African nations must stamp out corruption, and invest in areas in which the region has unique strengths, such as food production, not only to provide food, but also income for farmers to help them to mitigate the effects of the COVID-19.

Please click here (https://bit.ly/2ZYzCM8) to read the full report.

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Despite COVID-19 Crisis, East Africa Remains the Continent’s Fastest Growing Region
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